[Federal Register Volume 88, Number 248 (Thursday, December 28, 2023)]
[Rules and Regulations]
[Pages 89820-89973]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25646]



[[Page 89819]]

Vol. 88

Thursday,

No. 248

December 28, 2023

Part II





Department of the Treasury





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Office of the Comptroller of the Currency





Federal Reserve System





Federal Deposit Insurance Corporation





National Credit Union Administration





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12 CFR Parts 3, 4, 6, et al.





Rules of Practice and Procedure; Final Rule

Federal Register / Vol. 88 , No. 248 / Thursday, December 28, 2023 / 
Rules and Regulations

[[Page 89820]]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 3, 4, 6, 19, 108, 109, 112, 150, and 165

[Docket ID OCC-2021-0007]
RIN 1557-AE33

FEDERAL RESERVE SYSTEM

12 CFR Parts 238 and 263

[Docket No. R-1766]
RIN 7100-AG26

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 308

RIN 3064-AF10

NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 747

[NCUA 2021-0079]
RIN 3133-AF37


Rules of Practice and Procedure

AGENCY: Office of the Comptroller of the Currency, Treasury; Board of 
Governors of the Federal Reserve System; Federal Deposit Insurance 
Corporation; National Credit Union Administration.

ACTION: Final rule.

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SUMMARY: The Comptroller of the Currency (OCC), Board of Governors of 
the Federal Reserve System (Board), Federal Deposit Insurance 
Corporation (FDIC), and the National Credit Union Administration (NCUA) 
(collectively, the Agencies) are adopting final changes to the Uniform 
Rules of Practice and Procedure (Uniform Rules) to recognize the use of 
electronic communications in all aspects of administrative hearings and 
to otherwise increase the efficiency and fairness of administrative 
adjudications. The OCC, Board, and FDIC are also modifying their 
agency-specific rules of administrative practice and procedure (Local 
Rules). The OCC also is integrating its Uniform Rules and Local Rules 
so that one set of rules applies to both national banks and Federal 
savings associations and amending its rules on organization and 
functions to address service of process.

DATES: The rule is effective on April 1, 2024.

FOR FURTHER INFORMATION CONTACT: OCC: MaryAnn Nash, Counsel, and Heidi 
Thomas, Senior Counsel, Chief Counsel's Office, (202) 649-5490. If you 
are deaf, hard of hearing, or have a speech disability, please dial 7-
1-1 to access telecommunications relay services. Board: David Williams, 
Associate General Counsel, <a href="/cdn-cgi/l/email-protection#95f1f4e3fcf1bbe2fcf9f9fcf4f8e6d5f3e7f7bbf2fae3"><span class="__cf_email__" data-cfemail="3f5b5e49565b1148565353565e524c7f594d5d11585049">[email protected]</span></a>, (202) 452-3973, and 
H[eacute]ctor G. Bladuell, Senior Counsel, Legal Division, 
<a href="/cdn-cgi/l/email-protection#365e5355425944185118545a575243535a5a7650445418515940"><span class="__cf_email__" data-cfemail="fb939e988f9489d59cd599979a9f8e9e9797bb9d8999d59c948d">[email protected]</span></a>, (202) 452-2491. FDIC: Heather M. Walters, 
Counsel, Legal Division, <a href="/cdn-cgi/l/email-protection#c3aba6b4a2afb7a6b1b083a5a7aaa0eda4acb5"><span class="__cf_email__" data-cfemail="94fcf1e3f5f8e0f1e6e7d4f2f0fdf7baf3fbe2">[email protected]</span></a> (202) 898-6729; and Michael 
P. Farrell, Counsel, Legal Division, <a href="/cdn-cgi/l/email-protection#bad7dcdbc8c8dfd6d6fadcded3d994ddd5cc"><span class="__cf_email__" data-cfemail="8be6edeaf9f9eee7e7cbedefe2e8a5ece4fd">[email protected]</span></a>, (703) 340-9201. 
NCUA: Damon P. Frank, Senior Trial Attorney, and John H. Brolin, Senior 
Staff Attorney, Office of General Counsel, at (703) 518-6540.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 916 of the Financial Institutions Reform, Recovery and 
Enforcement Act of 1989, Public Law 101-73, 103 Stat. 183 (1989), 
required the Agencies, together with the Office of Thrift Supervision 
(OTS), to develop uniform rules and procedures for administrative 
hearings. In August 1991, the Agencies and OTS each adopted final 
Uniform Rules as well as Local Rules specific to each agency.\1\ Based 
on the experience gained in administrative hearings, the Agencies, 
together with OTS, modified the Uniform Rules and Local Rules in 
1996.\2\
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    \1\ The Agencies, together with the OTS, issued a joint notice 
of proposed rulemaking on June 17, 1991 (56 FR 27790). Each agency 
issued a final rule on the following dates: OCC on August 9, 1991 
(56 FR 38024); Board on August 9, 1991 (56 FR 38052); FDIC on August 
9, 1991 (56 FR 37968); and NCUA on August 8, 1991 (56 FR 37767). The 
OTS, whose rules and procedures were transferred to the OCC, the 
Board, and the FDIC in 2011, published its rules on August 12, 1991 
(56 FR 38317). The Agencies' rules are codified at 12 CFR part 19, 
subpart A (OCC); 12 CFR part 263, subpart A (Board); 12 CFR part 
308, subpart A (FDIC); and 12 CFR part 747, subpart A (NCUA).
    \2\ 61 FR 20330, May 6, 1996.
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    The Uniform Rules and Local Rules have remained largely unchanged 
since the 1996 amendments, while the practice of administrative 
hearings has changed fundamentally with the introduction of electronic 
communication and transmission. The current Uniform Rules were 
promulgated at a time when the Agencies accepted only paper pleadings. 
However, beginning in 2005, the Office of Financial Institution 
Adjudication (OFIA) established a dedicated electronic mailbox to 
accept electronic pleadings and service and, by 2006, paper pleadings 
were virtually eliminated in administrative hearings. Without rules in 
place to address electronic pleadings, the Administrative Law Judges 
(ALJs) opted to dictate procedures pertaining to electronic filing and 
other items on an ad hoc basis in their scheduling orders.
    The Agencies issued a proposed rule on April 13, 2022, to update 
and modernize the Uniform Rules as well as the Local Rules of the OCC, 
FDIC, NCUA, and the Board. The Agencies did not receive any substantive 
comments on the Uniform Rules or the Agencies' Local Rules. Therefore, 
for the reasons stated in the preamble to the proposed rule, the 
Agencies are publishing the Uniform and Local Rules without substantive 
change.\3\
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    \3\ Although the proposed rule provided common rule text for the 
Uniform Rules and line amendments to the Local Rules, this final 
rule publishes each agency's rule as amended in full.
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    In this final rule,
    <bullet> The Agencies are amending the Uniform Rules to recognize 
electronic pleadings and communications in administrative hearings and 
to reflect the experience of the Agencies in administrative litigation.
    <bullet> The OCC and the NCUA are also removing from the Uniform 
Rules the remaining references to the OTS, which was abolished in 
2011.\4\
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    \4\ The FDIC removed references to the OTS and updated its rules 
to include State savings associations by Final Rule on January 30, 
2015 (80 FR 5009). The Board similarly removed references to the OTS 
from its definitions and updated its rules to include savings and 
loan holding companies on September 13, 2011 (76 FR 56603).
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    <bullet> The OCC, Board, and FDIC are each amending certain 
sections of their Local Rules that they believe should be updated, 
improved, or clarified.
    <bullet> The OCC is consolidating its Uniform and Local Rules by 
applying part 19 to both national bank- and Federal savings 
association-related proceedings and investigations; removing its 
separate enforcement-related rules for Federal savings associations, 12 
CFR parts 108, 109, 112, and 165; and making corresponding technical 
changes to parts 3, 6, and 150.
    <bullet> The OCC is amending 12 CFR part 4, subpart A, Organization 
and Functions, to add a new Sec.  4.8 that addresses service of 
process.

II. Applicability Date

    As indicated in the proposed rule, the amendments made by this 
final rule to the Uniform Rules as well as to certain provisions of the 
Agencies' Local Rules will apply to adjudicatory proceedings initiated 
on or after the effective date of this final rule, April 1, 2024. The 
Agencies' rules that were in effect prior to April 1, 2024, will 
continue to apply to adjudicatory proceedings initiated before April 1, 
2024. This timing

[[Page 89821]]

ensures that parties to Agency adjudicatory proceedings have adequate 
notice of the rules governing those proceedings.
    For the OCC, Sec.  19.0 provides that the rules of practice and 
procedure set forth in subparts A through D and H, I, J, L, M, N, P, 
and Q apply to adjudicatory proceedings initiated on or after the 
effective date of this final rule, April 1, 2024. Rules applicable to 
national banks, Federal savings associations, or Federal branches and 
agencies that were in effect prior to April 1, 2024, continue to apply 
to adjudicatory proceedings initiated before April 1, 2024, unless 
otherwise stipulated by the parties.
    The OCC has made a few technical changes to its proposed transition 
provision. First, the OCC has moved this provision from proposed 
subpart R in part 19 to new Sec.  19.0 so that information about 
applicability of the revised rules for practice and procedure is more 
prominently placed. Second, the OCC has changed the title of the 
provision from ``effective date'' to ``applicability date'' for 
accuracy. Third, the OCC has made some minor wording changes for 
internal consistency. Fourth, the OCC has included the text of part 19 
as in effect the day before the final rule's effective date, April 1, 
2024, as appendix A to part 19 so that parties may reference the rules 
that apply to proceedings initiated before April 1, 2024. Lastly, the 
OCC has amended the transition provision to permit parties to 
proceedings initiated before April 1, 2024, to stipulate that the 
revised rules apply to such proceedings so that they are able to take 
advantage of the updated provisions.
    For the Board, the revised Uniform Rules and Local Rules in subpart 
B of part 263 apply only to adjudicatory proceedings initiated on or 
after the effective date of this final rule, April 1, 2024. The 
previous version of these rules, which are included in appendix A to 
part 263 of this final rule, are applicable to all adjudicatory 
proceedings initiated before April 1, 2024.
    The FDIC included a new Sec.  308.0 as a technical change to 
clarify the applicability date of the revised Uniform Rules set forth 
in subpart A. The newly revised Uniform Rules only apply to 
adjudicatory proceedings initiated on or after the effective date of 
this final rule, April 1, 2024. Any adjudicatory proceedings initiated 
before April 1, 2024, continue to be governed by the previous version 
of the Uniform Rules, which are included in appendix A to part 308 of 
this final rule.
    The NCUA has added to its existing Sec.  747.0, as a technical 
change, to make clear that the revised Uniform Rules apply to 
adjudicatory proceedings initiated on or after the effective date of 
this final rule, April 1, 2024.

III. Section-by-Section Discussion of Amendments to the Uniform Rules

    Although the discussion of these amendments is arranged as for a 
common rule, the Agencies are adopting the amendments individually. The 
Agencies have codified the Uniform Rules as follows: 12 CFR part 19, 
subpart A (OCC); 12 CFR part 263, subpart A (Board); 12 CFR part 308, 
subpart A (FDIC); and 12 CFR part 747, subpart A (NCUA).

General Comments

    The final rule replaces gender references such as ``him or her,'' 
``his or her,'' and ``himself or herself'' with gender-neutral 
terminology, where appropriate. Consistent with Federal Register 
drafting guidelines,\5\ the Agencies have replaced the word ``shall'' 
throughout the final rule with the terms ``must,'' ``will,'' or other 
appropriate language. Finally, the Agencies have replaced the term 
``administrative law judge'' with the abbreviation ``ALJ'' for 
``administrative law judge,'' as this abbreviation is commonly used and 
understood. These changes appear throughout the Uniform Rules and will 
not be discussed further in the individual sections.
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    \5\ National Archives, Federal Register Writing Resources for 
Federal Agencies: Drafting Legal Documents, https://www.archives.gov/federal-register/write/legal-docs/clear-writing.html.
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Section __.1 Scope

    Section __.1 lists the types of adjudicatory proceeding to which 
the Uniform Rules apply. The final rule updates the list of civil money 
penalty proceedings covered by the Uniform Rules described in Sec.  
__.1(e) to include section 5, section 9, and section 10 of the Home 
Owners' Loan Act (HOLA).\6\ These sections of the HOLA are applicable 
to Federal savings associations now supervised by the OCC, State-
chartered savings associations now supervised by the FDIC, and savings 
and loan holding companies supervised by the Board. The final rule also 
adds a reference to ``the former Office of Thrift Supervision'' in the 
OCC's Sec.  19.1(e)(10) to clarify that the Uniform Rules will apply to 
civil money proceedings for violations of orders issued, written 
agreements executed, and conditions imposed in writing by OTS.
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    \6\ The Board made these updates on September 13, 2011 (76 FR 
56603).
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Section __.2 Rules of Construction

    Section __.2 of the Uniform Rules sets forth the rules of 
construction for the Uniform Rules. The final rule amends this section 
to eliminate Sec.  __.2(b), which provides that any use of masculine, 
feminine, or neuter gender encompasses all three, if such use would be 
appropriate. The final rule replaces all gender references such as 
``him or her,'' ``his or her,'' and ``himself or herself'' with gender-
neutral terminology; thus, this provision is no longer necessary.

Section __.3 Definitions

    Section __.3 of the Uniform Rules includes definitions applicable 
to the Uniform Rules and, unless otherwise specified, the Local Rules. 
The final rule now defines the term ``electronic signature'' because 
Sec.  __.7 of the final rule provides that electronic signatures may be 
used to satisfy the good faith certification requirement. In their 
respective final rules, the Agencies have replaced the definition of 
violation in Sec.  __.3 with a cross-reference to the identical 
definition in section 3(v) of the Federal Deposit Insurance Act (FDIA), 
12 U.S.C. 1813(v).\7\ The final rule also eliminates legacy references 
to the Office of Thrift Supervision in the definition of ``OFIA'' and 
the definition of ``Uniform Rules.''
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    \7\ The NCUA included this updated definition of violation in 
the proposed rule and is adopting the same wording in the final 
rule. The discussion in the preamble to the proposed rule 
inadvertently omitted reference to the NCUA making this change along 
with the OCC, Board, and FDIC.
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    The definition of ``institution'' in the OCC's final rule now 
includes the term ``Federal savings association'' in order to make the 
Uniform Rules and the OCC's Local Rules in part 19 of title 12 
applicable to Federal savings associations, which have been regulated 
by the OCC since 2011.\8\
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    \8\ As described elsewhere in this Supplementary Information, 
the OCC is removing its Uniform Rules and Local Rules applicable to 
Federal savings associations, parts 108, 109, 112, and 165 of title 
12.
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    The Board's final rule adds ``nonbank financial companies'' and 
``financial market utilities'' designated by the Financial Stability 
Oversight Council to its definition of ``institution'' to clarify that 
the Uniform Rules are applicable to these entities, which are 
supervised by the Board pursuant to the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (Dodd-Frank Act).\9\ In addition, the 
Board's final rule clarifies that organizations operating under section 
25A of the Federal Reserve Act, Federal and State ``branches,'' as well 
as

[[Page 89822]]

``agencies'' as defined in section 1(b) of the International Banking 
Act, and ``any other entity subject to the supervision of the Board,'' 
are included in its definition of ``institution.'' Finally, the Board's 
final rule replaces the word ``savings association'' with ``depository 
institution'' in 12 CFR 263(f)(6) to conform this language to the 
language in 12 U.S.C. 1818(b)(3).
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    \9\ Public Law 111-203, 124 Stat. 1376 (2010).
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Section __.5 Authority of the Administrative Law Ludge (ALJ)

    Section __.5 of the Uniform Rules addresses the authority of the 
ALJ. The final rule amends Sec.  __.5(b)(2) to add the term ``other 
orders'' to the list of specific orders an ALJ is authorized to issue, 
quash, or modify. This change clarifies that the authority of the ALJ 
to issue orders is not limited to subpoenas, subpoenas duces tecum, and 
protective orders and may include other types of orders that are not 
enumerated in this section. The final rule also amends Sec.  
__.5(b)(11) to change the term ``presiding officer'' to ``ALJ'' to 
avoid confusion and clarify that the ALJ has the powers necessary and 
appropriate to discharge the duties of this role.

Section __.6 Appearance and Practice in Adjudicatory Proceedings

    Section __.6 of the Uniform Rules addresses appearance and practice 
in adjudicatory proceedings. The final rule amends Sec.  __.6(a)(2) to 
state simply that an individual may appear on their own behalf. This 
change eliminates language that is duplicative and unnecessary to the 
meaning of the provision. The final rule also amends Sec.  __.6(a)(3) 
to include a requirement that a notice of appearance include a written 
acknowledgment that the individual has reviewed and will comply with 
the Uniform Rules and Local Rules. This requirement ensures that 
representatives appearing in the proceeding are informed of the rules 
that govern the proceedings.

Section __.7 Good Faith Certification

    Section __.7 of the Uniform Rules addresses the requirement for 
good faith certification for every filing or submission of record 
following the issuance of a notice. The final rule amends Sec.  __.7(a) 
to require that the counsel of record, including an individual who acts 
as their own counsel, include a mailing address, an electronic mail 
address, and a telephone number with every certification. The final 
rule also amends this section to permit electronic signatures to 
satisfy the signature requirements of the certification. These changes 
conform the rules to the current practice of electronic filing.

Section __.9 Ex Parte Communications

    Section __.9 of the Uniform Rules addresses ex parte communications 
in administrative proceedings. The final rule amends Sec.  __.9(c) to 
clarify that upon the occurrence of ex parte communication, the ALJ or 
the Agency Head must determine whether any action in the form of 
sanctions should be taken concerning the ex parte communication. The 
final rule amends Sec. _.9(e)(1) to better align it with section 5 of 
the Administrative Procedure Act, 5 U.S.C. 554(d). Specifically, the 
final rule adds language stating that the ALJ may not consult with a 
person or party on a fact in issue without giving all parties notice 
and an opportunity to participate and may not be responsible to or 
subject to the supervision or direction of an employee agent engaged in 
the performance of investigative or prosecuting functions for any of 
the Agencies. Finally, the final rule amends Sec.  __.9(e)(2) to refer 
to administrative or judicial proceedings rather than public 
proceedings to better describe the type of proceedings subject to the 
rule.

Section __.10 Filing of Papers

    Section __.10 of the Uniform Rules addresses the requirements for 
the filing of papers. The final rule amends and renumbers Sec.  
__.10(b) to remove an outdated section on rules governing transmission 
by electronic media and replace it with a section stating that filing 
may be accomplished by electronic mail or other electronic means 
designated by the Agency Head or the ALJ. The final rule amends 
Sec. _.10(b) to eliminate references to specific carriers and names of 
mail delivery services and instead refer generally to same day courier 
services and overnight delivery services. The final rule amends Sec.  
__.10(c), which addresses the formal requirements as to papers filed, 
to require papers to include the mailing address, electronic mail 
address, and telephone number of the counsel or party making the 
filing. Finally, the final rule eliminates Sec.  __.10(c)(4), which 
required the filing of an original and one copy of each filing and is 
no longer necessary, given that the vast majority of papers are filed 
electronically, consistent with current adjudicatory practice. The 
final rule retains the existing methods of filing by paper, such as 
personal service, same day courier, overnight delivery, and mail, with 
appropriate modifications of the descriptions of those methods to 
conform to current terminology and standards for delivery.

Section __.11 Service of Papers

    Section __.11 of the Uniform Rules addresses the requirements for 
service of papers. The modifications to Sec.  __.11 provide for 
electronic filing, where appropriate, and simplify and update the 
descriptions for other, non-electronic, means of filing. The final rule 
amends Sec.  __.11(b) to add service by electronic mail or other 
electronic means as a method for serving papers, consistent with 
current practice. The final rule retains the existing methods of 
service by paper, such as personal service, same day courier, overnight 
delivery, and mail, and replaces references to specific carriers and 
delivery services with general references to same day courier service 
and overnight delivery service. The final rule also amends Sec.  
__.11(c)(1) to require that all papers required to be served by the 
Agency Head or the ALJ upon a party that has appeared in the proceeding 
will be served by electronic mail or other electronic means designated 
by the Agency Head or the ALJ. For parties that have not appeared in 
the proceeding in accordance with Sec.  __.6, the final rule preserves 
the option for non-electronic methods of service and modifies the 
descriptions of some of those methods to conform to current terminology 
and standards for delivery. Finally, in Sec.  __.11(d), the final rule 
generally retains the existing methods for the service of subpoenas 
with appropriate modifications to the descriptions of the methods to 
conform to current terminology and standards for delivery.

Section __.12 Construction of Time Limits

    Section __.12 of the Uniform Rules addresses the construction of 
time limits. The final rule amends Sec.  __.12(b), which addresses when 
papers are deemed to be filed or served, to provide that in the case of 
transmission by electronic mail or other electronic means, filing and 
service are deemed to be effective upon transmittal by the serving 
party. The final rule retains the existing times for non-electronic 
methods of filing and service and updates the descriptions of these 
methods to make them consistent with the updated descriptions in 
Sec. Sec.  __.10 and __.11. The final rule amends Sec.  __.12(c), which 
addresses the calculation of time for service and filing of responsive 
papers, to provide that in the case of service by electronic mail or 
other electronic means, the time limits are calculated by adding one 
calendar

[[Page 89823]]

day to the prescribed period. Finally, the final rule provides for the 
addition of two calendar days, rather than one, in the case of service 
by overnight delivery service and retains the language providing for 
the addition of three calendar days for service made by mail.

Section __.14 Witness Fees and Expenses

    Section __.14 of the Uniform Rules addresses witness fees and 
expenses in administrative proceedings. The final rule amends Sec.  
__.14 to clarify the general rule, in Sec.  __.14(a), that all 
witnesses, including an expert witness who testifies at a deposition or 
hearing, will be paid the same fees for attendance and mileage as are 
paid in the United States district courts in proceedings in which the 
United States is a party. The final rule also adds language in Sec.  
__.14(b) to clarify that the Agencies are not required to pay witness 
fees and mileage for testimony by a party. The final rule retains the 
current language governing the timing of witness payments in a new 
Sec.  __.14(c).

Section __.15 Opportunity for Informal Settlement

    Section __.15 of the Uniform Rules addresses the rules and process 
for informal settlement once a proceeding has been initiated. The final 
rule revises this section to more plainly express the existing rule 
that an offer or proposal for informal settlement may only be made to 
Enforcement Counsel.

Section __.18 Commencement of Proceeding and Contents of Notice

    Section __.18(a) of the Uniform Rules governs the commencement of 
administrative proceedings. The final rule amends Sec.  __.18(a)(1)(ii) 
to provide that Enforcement Counsel serves the notice upon the 
respondent to begin proceedings.\10\ The final rule also amends this 
section to provide that Enforcement Counsel may serve the notice upon 
counsel for the respondent, rather than the respondent, provided that 
counsel for the respondent has confirmed that counsel represents the 
respondent in the matter and will accept service of the notice on 
behalf of the respondent. By requiring counsel to confirm 
representation of a respondent, the Agencies hope to clarify when it is 
appropriate to serve notice on an individual who purports to represent 
the respondent. Finally, the final rule amends Sec.  __.18(a)(1)(iii) 
to make it clear that Enforcement Counsel files the notice with 
OFIA.\11\
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    \10\ The FDIC has already made this change in its version of the 
Uniform Rules in connection with amendments that became effective on 
January 12, 2021.
    \11\ The NCUA is deleting from part 747 the reference to change-
in-control proceedings under 12 U.S.C. 1817(j), which does not apply 
to credit unions or the NCUA. The NCUA is making the same deletion 
in Sec.  __.33.
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    Section __.18(b) of the Uniform Rules addresses the contents of the 
notice in administrative proceedings. The final rule amends Sec.  
__.18(b) to provide that notice pleading applies in administrative 
proceedings, meaning that a notice need only provide a short and plain 
statement of the claim(s) showing that the agency is entitled to 
relief. The final rule also makes a technical change to Sec.  
__.18(b)(2) to change the description from ``a statement of the matters 
of fact or law showing the [Agency] is entitled to relief'' to simply 
``matters of fact or law showing that the [Agency] is entitled to 
relief.'' The Agencies believe the reference to ``a statement'' in this 
section has no substantive meaning and, thus, have removed it.

Section __.19 Answer

    Section __.19 of the Uniform Rules sets out the requirements for an 
answer in an administrative proceeding. The final rule amends Sec.  
__.19(c)(2) to provide that if a respondent fails to request a hearing 
as required by law within the applicable time frame, the notice of 
assessment constitutes a final and unappealable order, in accordance 
with 12 U.S.C. 1818(i)(2)(E)(ii) and 12 U.S.C. 1786(k)(2)(E)(ii), 
without further action by the ALJ. In the past, there has been 
confusion about whether any additional action on the part of the ALJ is 
required in this situation, and this language clarifies that no further 
action is necessary.

Section __.24 Scope of Document Discovery

    Section __.24 of the Uniform Rules addresses the scope of discovery 
in an administrative proceeding and Sec.  __.24(a) addresses 
limitations on discovery. The final rule updates the definition of the 
term ``documents'' in Sec.  __.24(a)(1) to include not only writings, 
drawings, graphs, charts, photographs, and recordings, but 
electronically stored information and data or data compilations stored 
in any medium from which information can be obtained. This expanded 
definition of the term ``document'' is necessary to account for the 
range of digital information now available. The final rule amends Sec.  
__.24(a)(3) to clarify that discovery by the use of either 
interrogatories or requests for admission is not permitted. The final 
rule moves the paragraph on relevance currently in Sec.  __.24(b) to a 
new Sec.  __.24(a)(4) because that provision functions as a limitation 
on discovery. The final rule amends Sec.  __.24(c) to clarify the list 
of privileges applicable to otherwise discoverable documents. In 
addition to the attorney-client privilege and the work-product 
doctrine, the proposed language would also specifically identify the 
bank examination privilege and the law enforcement privilege and 
exclude those privileged documents from discovery. Finally, the final 
rule adds language to Sec.  __.24(d) to provide that document 
discovery, including all responses to discovery requests, must be 
completed by the date set by the ALJ and no later than 30 days prior to 
the date scheduled for the commencement of the hearing. This language 
recognizes the role of the ALJ in establishing a schedule for discovery 
while also providing for discovery to be completed earlier in the 
hearing process.

Section __.25 Request for Document Discovery From Parties

    Section __.25 of the Uniform Rules addresses requests for document 
discovery from parties in administrative proceedings. The final rule 
replaces the heading ``General rule'' with ``Document requests'' in 
Sec.  __.25(a) to better identify the subject matter of the section. 
The final rule amends Sec.  __.25(a) to add a paragraph (a)(1) stating 
that a party may serve on another party a request not only to produce 
discoverable documents but to permit the requesting party or its 
representative to inspect or copy discoverable documents that are in 
the possession, custody, or control of the party upon whom the request 
is served. It has been the practice of parties in administrative 
proceedings to permit the inspection and copying of discoverable 
documents, and this language formalizes that practice. The final rule 
includes language to provide that a party responding to a request for 
inspection may produce copies of documents or electronically stored 
information instead of permitting inspection. In many cases, providing 
documents or electronically stored information directly is more 
efficient than permitting inspection, and this amendment preserves the 
right of a responding party to make that choice. The final rule 
includes a new paragraph (a)(2) to simplify the language that 
previously appeared in Sec.  __.25(b) regarding the identification of 
documents to be produced and require that any request describe with 
reasonable particularity each item or category of items to be inspected 
and

[[Page 89824]]

specify a reasonable time, place, and manner for the inspection or 
production.
    The final rule amends the rules governing production or copying, as 
set out in a new Sec.  __.25(b)(1), to require that, unless a 
particular form is specified by the ALJ or agreed upon by the parties, 
the producing party must produce copies of documents as they are kept 
in the usual course of business or organized to correspond to the 
categories of the request, and produce electronically stored 
information in a form in which it is ordinarily maintained or in a 
reasonably usable form. The Agencies recognize that the ways in which 
electronically stored information may be stored and transmitted may 
change over time and are adopting the reasonably usable standard for 
electronically stored information to provide flexibility.
    The final rule simplifies the rules associated with the costs of 
document production in a new Sec.  __.25(b)(2), which requires the 
producing party to pay its own costs to respond to a discovery request 
unless otherwise agreed by the parties. This language eliminates the 
earlier requirement that a requesting party prepay the producing party 
for certain costs while also allowing the parties to agree to share 
costs, as appropriate in a particular case.
    The final rule modifies the time limits for motions to limit 
discovery in Sec.  __.25(d). In Sec.  __.25(d)(1), the final rule 
extends the time limit for a party to object to a discovery request 
from within ten to within 20 days of being served with such a request. 
In Sec.  __.25(d)(2), the final rule extends the time limit for a party 
to file a written response from within five to within ten days of 
service of the motion. Additional time allows the parties to digest 
such requests and engage with each other to narrow the scope of the 
request before having to file a motion with the ALJ. The Agencies 
believe that parties making motions to limit discovery and responding 
to motions to limit discovery will benefit from additional time to 
review and respond to such requests.
    Finally, the final rule amends Sec.  __.25(e) to specify the 
available privileges that may be asserted in connection with a request 
for production. The section now includes attorney-client privilege, 
attorney work-product doctrine, bank examination privilege, law 
enforcement privilege, any government deliberative process privilege, 
other privileges of the Constitution, any applicable act of Congress, 
and other principles of common law as grounds for withholding 
documents.

Section __.26 Document Subpoenas to Nonparties

    Section __.26 of the Uniform Rules addresses document subpoenas to 
third parties in administrative proceedings. The final rule amends 
Sec.  __.26(b)(1) to provide that a person to whom a document subpoena 
is directed may file a motion to quash or modify such subpoena with the 
ALJ. This amendment clarifies to whom the motion to quash should be 
directed.

Section __.27 Deposition of Witness Unavailable for Hearing

    Section __.27 of the Uniform Rules addresses the deposition of 
witnesses unavailable for an administrative hearing. The final rule 
amends Sec.  __.27(a)(2) to require that the application for a subpoena 
state the manner in which the deposition is to be taken, in addition to 
the time and place, and provide explicitly that a deposition may be 
taken by remote means. These changes modernize the rules and conform 
the rules to existing practice. The final rule simplifies Sec.  
__.27(a)(4) by eliminating unnecessary language related to where 
subpoenas may be served. In order to further provide for remote 
depositions, the final rule amends Sec.  __. 27(c)(1) to provide that a 
court reporter or other person authorized to administer an oath may 
administer the oath remotely without being in the physical presence of 
the deponent, by stipulation of the parties or order by the ALJ. The 
final rule amends Sec.  __.27(d) to clarify that if a subpoenaed person 
fails to comply with any subpoena issued pursuant to this section the 
aggrieved party may apply to the appropriate United States district 
court for an order requiring compliance with the portions of the 
subpoena with which the subpoenaed party has not complied. Finally, the 
final rule replaces an inaccurate cross-reference to paragraph (c)(3) 
with a correct reference to paragraph (c)(2).

Section __.29 Summary Disposition

    Section __.29 of the Uniform Rules addresses summary disposition. 
The final rule modifies Sec.  __.29(c) to provide that a request for a 
hearing on a motion must be made in writing. The new language 
formalizes the process of requesting a hearing and increases the 
clarity of the process.

Section __.31 Scheduling and Prehearing Conferences

    Section __.31 of the Uniform Rules addresses scheduling and 
prehearing conferences. The final rule amends Sec.  __.31(a) to clarify 
that the prehearing conference must be set within 30 days of service of 
the notice or an order commencing a proceeding and eliminate the option 
in the current rule for the parties to agree on another time. The final 
rule also adds language to clarify that it is a schedule for discovery, 
and not actual discovery, that the parties may determine at the 
scheduling conference. Finally, the final rule eliminates references to 
``telephone'' conferences in order to make the provision more 
technologically neutral.

Section __.32 Prehearing Submissions

    Section __.32 of the Uniform Rules addresses prehearing 
submissions. The final rule amends Sec.  __.32(a) to extend the time 
for a party to file prehearing submissions with the ALJ from 14 days to 
20 days before the start of the hearing. This change will give the 
parties more flexibility in completing their filings. The final rule 
further amends Sec.  __.32 to update the required prehearing 
submissions and Sec.  __.32(a)(1) to require the submission of a 
prehearing statement that states the party's position with respect to 
the legal issues presented, the statutory and case law upon which the 
party relies, and the facts the party expects to prove at the hearing. 
The final rule amends Sec.  __.32(a)(2) to require that the final list 
of witnesses include the name, mailing address, and electronic mail 
address for each witness and to clarify that the list of witnesses need 
not identify the exhibits to be relied upon by each witness at the 
hearing and that the list of exhibits should be a list of exhibits 
expected to be introduced at the hearing.

Section __.35 Conduct of Hearings

    Section __.35 of the Uniform Rules addresses the conduct of 
administrative hearings. The final rule adds a new Sec.  __.35(c) to 
provide rules governing electronic presentations in a hearing. The new 
language provides that the ALJ may direct the use of, or any party may 
use, an electronic presentation during the hearing. If an ALJ requires 
an electronic presentation, each party will be responsible for their 
own presentation or related costs unless the parties agree to another 
manner in which to allocate responsibilities and costs. This new 
language accounts for electronic presentations that are not addressed 
in the existing rules but are used routinely in hearings.

[[Page 89825]]

Section __.36 Evidence

    Section __.36 of the Uniform Rules sets forth the rules governing 
evidence in an adjudicatory proceeding. The final rule amends Sec.  
__.36(d)(2) to refer to ``direct questioning'' rather than ``direct 
interrogation'' of witnesses in order to clarify, in plain language, 
the meaning of this section.

IV. Section-by-Section Discussion of Amendments to the Local Rules of 
Each Agency

A. Amendments to OCC Local Rules

    Part 19, subparts B through P, address local rules of practice and 
procedure specific to OCC investigations, hearings before the OCC, and 
other OCC-related proceedings involving national banks. The 
corresponding rules for Federal savings association-related proceedings 
and investigations, transferred from the former OTS to the OCC by the 
Dodd-Frank Act, are set forth at 12 CFR parts 108, 109, 112, and 165. 
Many of the national bank and Federal savings association-related 
provisions are similar, but in some cases no corresponding rule exists 
or one set of rules provides more specificity than the other. The final 
rule consolidates these rules by applying part 19 to both national 
bank- and Federal savings association-related proceedings and 
investigations and removes parts 108, 109, 112, and 165. The final rule 
also amends the Local Rules to add certain provisions of the Federal 
savings association rules that are not currently included in part 19 
but that the OCC believes should apply to both Federal savings 
associations and national banks. In addition, the final rule 
reorganizes certain rules in part 19, including subparts D, E, F, and G 
relating to actions under the Federal securities laws; adds new 
provisions addressing the Equal Access to Justice Act (EAJA); and adds 
a new subpart Q addressing the forfeiture of a national bank, Federal 
savings association, or Federal branch and agency charter or franchise 
for certain money laundering or cash transaction offenses.
    The amendments to the OCC's Local Rules are discussed below.
Subpart B--Procedural Rules for OCC Adjudications
19.100 Filing Documents
    Current Sec. Sec.  19.100 and 109.104(g) require that all filings 
with or referred to the Comptroller or ALJ in any proceeding under 
parts 19 or 109, respectively, be filed with the OCC Hearing Clerk. The 
two provisions are substantively the same except that Sec.  19.100 
provides a more detailed description of the types of filings to which 
the regulation applies. As a result of the final rule's application of 
part 19 to Federal savings associations and removal of part 109, Sec.  
19.100 applies to filings in Federal savings association-related 
proceedings as of the final rule's effective date, April 1, 2024. 
Furthermore, the final rule amends Sec.  19.100 to remove the OCC 
filing street address and to require the filing to be made in a manner 
prescribed by Sec.  19.10(b) and (c). Sections 19.10(b) and (c) 
prescribe the permissible filing methods and list form and content 
requirements for filing papers with the OCC. As amended by this final 
rule, filings are permitted by electronic mail or other electronic 
means designated by the Comptroller or the ALJ as of the final rule's 
effective date, April 1, 2024. Lastly, the final rule amends the 
current provision to clarify that the materials filed include any 
attachments or exhibits to the listed documents.
19.101 Delegation to OFIA
    Both current Sec. Sec.  19.101 and 109.101 provide that an ALJ at 
the Office of Financial Institution Adjudication (OFIA) will conduct 
actions brought under the respective subpart A rules. As a result of 
the final rule's application of part 19 to Federal savings 
associations, Sec.  19.101 applies to adjudicatory actions brought 
against either national banks or Federal savings associations as of the 
final rule's effective date, April 1, 2024. The final rule makes one 
stylistic revision to Sec.  19.101 to remove the passive sentence 
structure.
19.102 Civil Money Penalties
    The final rule adds a new Sec.  19.102 that incorporates parts of 
Sec.  109.103(b), which provides rules for the payment of civil money 
penalties. The national bank rules currently do not address this topic 
with specificity, and the OCC has determined that these provisions, 
which clarify when parties must pay civil money payments, should apply 
to both national banks and Federal savings associations. As a result of 
this amendment, respondents are required to pay civil money penalties 
assessed pursuant to subpart A of part 19 within 60 days after the 
issuance of the notice of assessment, unless the OCC requires a 
different time for payment. If a respondent has made a timely request 
for a hearing to challenge the assessment of the penalty, the 
respondent is not required to pay the penalty until the OCC has issued 
a final order of assessment. In such instances, the respondent is 
required to pay the penalty within 60 days of service of the final 
order unless the OCC requires a different time for payment.
Subpart C--Removals, Suspensions, and Prohibitions When a Crime Is 
Charged or a Conviction Is Obtained
    Current subpart C of part 19 includes the rules applicable in 
hearings brought against any institution-affiliated party \12\ who the 
OCC has suspended or removed from office or prohibited from further 
participation in the affairs of a depository institution pursuant to 
section 8(g) of the FDIA (12 U.S.C. 1818(g)). Part 108 applies similar 
rules to officers, directors, or other persons participating in the 
conduct of the affairs of a Federal savings association, Federal 
savings association subsidiary, or affiliate service corporation, 
although part 108 differs slightly on certain procedural issues. As 
described below, the final rule amends subpart C to incorporate certain 
provisions of part 108 that are helpful to the OCC in these 
adjudicatory actions, specifically to apply amended subpart C to both 
national banks and Federal savings associations and remove part 108. 
Although part 108 does not use the term ``institution-affiliated 
party,'' the OCC believes that the scope of part 108 is similar in 
substance to this term as defined in Sec.  19.3 by reference to the 
FDIA.
---------------------------------------------------------------------------

    \12\ ``Institution-affiliated party,'' as defined in current 
Sec.  19.3 and in this final rule by reference to section 3(u) of 
the FDIA (12 U.S.C. 1813(u)), means: (1) any director, officer, 
employee, or controlling stockholder (other than a bank holding 
company or savings and loan holding company) of, or agent for, an 
insured depository institution; (2) any other person who has filed 
or is required to file a change-in-control notice with the 
appropriate Federal banking agency under 12 U.S.C. 1817(j); (3) any 
shareholder (other than a bank holding company or savings and loan 
holding company), consultant, joint venture partner, and any other 
person as determined by the appropriate Federal banking agency who 
participates in the conduct of the affairs of an insured depository 
institution; and (4) any independent contractor (including any 
attorney, appraiser, or accountant) who knowingly or recklessly 
participates in any violation of any law or regulation, any breach 
of fiduciary duty, or any unsafe or unsound practice which caused or 
is likely to cause more than a minimal financial loss to, or a 
significant adverse effect on, the insured depository institution.
---------------------------------------------------------------------------

19.110 Scope
    The final rule amends Sec.  19.110 to include a definitions section 
for subpart C similar to the one for Federal savings associations in 
Sec.  108.2 to enhance the understanding and application of the 
regulation and simplify the regulatory text. New Sec.  19.110(b) 
defines ``petitioner'' to mean an individual who has filed a petition 
for informal hearing under subpart C; ``depository institution'' to 
mean any national bank, Federal savings association, or Federal

[[Page 89826]]

branch of a foreign bank; and ``OCC Supervisory Office'' to mean the 
Senior Deputy Comptroller or Deputy Comptroller of the OCC department 
or office responsible for supervision of the depository institution, 
or, in the case of an individual no longer affiliated with a particular 
depository institution, the Deputy Comptroller for Special Supervision. 
Furthermore, the final rule labels the existing paragraph in Sec.  
19.110 as Sec.  19.110(a), Scope, and retitles the section heading to 
account for the addition of definitions.
19.111 Suspension, Removal, or Prohibition
    The final rule reorganizes Sec.  19.111 into paragraphs; retitles 
the section heading, as well as the subpart, to clarify that it applies 
to institution-affiliated parties; and removes passive sentence 
structure. In newly designated Sec.  19.111(a), the final rule corrects 
an omission in current Sec.  19.111, which provides that the 
Comptroller may serve a notice of suspension or order of removal or 
prohibition pursuant to 12 U.S.C. 1818(g) on an institution-affiliated 
party and must serve a copy of this notice or order on the appropriate 
depository institution. Because 12 U.S.C. 1818(g) also provides for a 
notice of prohibition, the final rule adds a reference to this notice 
of prohibition to this paragraph. In addition, as in Sec.  108.4, newly 
designated Sec.  19.111(a) specifies the manner of service by the 
Comptroller, providing that the Comptroller serve the notice or order 
in the manner set forth in Sec.  19.11, Service of papers. The final 
rule also moves the information regarding a request for a hearing by 
the institution-affiliated party to a separate Sec.  19.111(b); adds 
the ability to send the hearing request by same day courier service or 
overnight delivery service, in addition to by certified mail or by 
personal service with a signed receipt as provided under the current 
rule; and adds the caveat that this submission rule applies unless 
instructed otherwise by the Comptroller. This revision also utilizes 
the newly defined term ``OCC Supervisory Office.''
    In addition, the final rule includes in Sec.  19.111(b)(2) a 
provision similar to Sec.  108.5(b) that requires an institution-
affiliated party in a request for a hearing to admit or deny each 
allegation, or state that they lack sufficient information to admit or 
deny each allegation, which has the effect of a denial. Section 
19.111(b)(2) also provides that denials must fairly meet the substance 
of each allegation denied and that general denials are not permitted; 
when the institution-affiliated party denies part of an allegation, 
that part must be denied and the remainder specifically admitted; and 
any allegation in the notice or order which is not denied is deemed 
admitted for purposes of the proceeding. Furthermore, similar to Sec.  
108.5(c), Sec.  19.111(b)(2) provides that the request must state with 
particularity how the institution-affiliated party intends to show that 
its continued service to or participation in the affairs of the 
institution would not pose a threat to the interests of the 
institution's depositors or impair public confidence in any 
institution. The OCC believes that adopting these provisions from the 
Federal savings association regulation will help narrow the issues to 
be contested and make Sec.  19.111 more consistent with the 
adjudicatory rule in Sec.  19.19.
    Furthermore, the final rule adds the default provision included in 
Sec.  108.8 to Sec.  19.111, as new paragraph (c). Under this new 
paragraph, if the institution-affiliated party fails to timely file a 
petition for a hearing pursuant to Sec.  19.111(b), fails to appear at 
a hearing either in person or by attorney, or fails to submit a written 
argument where oral argument has been waived pursuant to Sec.  
19.112(c), the notice of suspension or prohibition will remain in 
effect until the information, indictment, or complaint is finally 
disposed of and the order of removal or prohibition will remain in 
effect until terminated by the OCC. The OCC believes the application of 
this provision to national banks will clarify that there are 
consequences if a petitioner fails to appear or fails to answer.
19.112 Informal Hearing
    The final rule makes a number of changes to Sec.  19.112, which 
provides the procedures for informal suspension or removal hearings 
before the OCC involving an institution-affiliated party. In Sec.  
19.112(a), the final rule updates the name of the OCC's Enforcement and 
Compliance Division to OCC Enforcement. The final rule also removes the 
requirement in this paragraph that the OCC Supervisory Office notify 
the appropriate OCC District Counsel of the hearing, as this is an 
unnecessary step.
    In Sec.  19.112(c)(2), the final rule adds language to clarify 
that, when responding to a petitioner's submissions, the OCC serves 
other parties in the manner set forth in Sec.  19.11(c).
    In Sec.  19.112(d), the final rule amends paragraph (d)(2), which 
provides that the informal hearing is not governed by formal rules of 
evidence, to clarify that these inapplicable formal rules of evidence 
include the Federal Rules of Evidence, as provided in Sec.  19.36. The 
final rule also clarifies paragraph (d)(3)(i) by breaking up the first 
sentence into two sentences. As revised, paragraph (d)(3)(ii) provides 
that the presiding officer may require, instead of permit as in the 
current paragraph, a shorter time period in which the parties may 
request oral testimony or witnesses at a hearing, which is the more 
accurate action for a presiding officer. As in Sec.  19.27(c), the 
final rule also amends Sec.  19.112(d)(3)(ii) to provide that, by 
stipulation of the parties or by order of the presiding officer, a 
court reporter or other authorized person may administer the required 
oath to a witness remotely without being in the physical presence of 
the witness. This amendment updates the current oath requirement for 
witnesses to account for remote proceedings and conforms this provision 
to Sec.  19.112(d)(4), which permits electronic presentations at the 
hearing. In Sec.  19.112(d)(3)(iii), the final rule makes technical 
changes to the different actions a presiding officer may take related 
to a suspension or prohibition based on an indictment, information, or 
complaint and a removal or prohibition with respect to a conviction or 
pre-trial diversion program to better reflect 12 U.S.C. 1818(g). 
Throughout paragraph (d) the final rule makes technical corrections by 
replacing ``appointed OCC attorney'' with ``OCC.''
    The final rule also adds a new paragraph (d)(4) to Sec.  19.112 to 
provide rules governing electronic presentations in the course of a 
hearing. As in Sec.  19.35(c), this provision provides that, based on 
the circumstances of each hearing, the presiding officer may direct the 
use of, or any party may elect to use, an electronic presentation 
during the hearing. If the presiding officer requires an electronic 
presentation, each party will be responsible for its own presentation 
or related costs unless the parties agree to allocate presentation 
responsibilities and costs differently. This new language is necessary 
to account for the routine use of electronic presentations in hearings 
that existing rules do not address.
    Throughout Sec.  19.112, the final rule utilizes the newly defined 
term ``OCC Supervisory Office'' and removes passive sentence structure.
19.113 Recommended and Final Decisions
    The final rule makes a number of changes to Sec.  19.113, which 
provides the procedures for decisions by the presiding officer and the 
OCC. The final rule updates Sec.  19.113(c) to permit the Comptroller 
to notify the petitioner of a

[[Page 89827]]

decision by electronic mail or other electronic means, if the 
petitioner consents, instead of by registered mail. The final rule also 
makes technical changes to paragraph (c) by replacing ``when'' with 
``if'' in describing whether the petitioner has waived an oral hearing, 
replacing the ``must'' with ``will'' in describing the Comptroller's 
notification of the decision, and replacing the ``and'' with ``or'' in 
describing the actions that the Comptroller may affirm, terminate, or 
modify in its final decision. In Sec.  19.113(d), the final rule 
clarifies that there could be more than one charge against an 
institution-affiliated party. In Sec.  19.113(f), the final rule 
removes the passive sentence structure. Lastly, the final rule adds 
headings to each paragraph.
Subparts D Through G--Actions Under the Federal Securities Laws
    Subparts D, E, F, and G of current part 19 set forth the procedures 
applicable to actions taken by the OCC with respect to banks pursuant 
to various provisions of the Federal securities laws, including the 
Securities Exchange Act of 1934 (Exchange Act). Specifically, subpart D 
addresses exemption hearings under section 12(h) of the Exchange Act, 
subpart E addresses disciplinary proceedings, subpart F addresses civil 
money penalties, and subpart G addresses cease and desist authority. 
Although these Federal securities laws also apply to Federal savings 
associations, there are no comparable provisions in OCC regulations for 
Federal savings associations. Instead, the former OTS relied on the 
authority granted under the Exchange Act for these actions rather than 
incorporating the authority into its rules and specified in Sec.  
109.100(c) that the Uniform Rules of Practice and Procedure in subpart 
A of part 109 applied to proceedings under the Exchange Act.
    In the final rule, the OCC streamlines the regulation by combining 
subparts D, E, F, and G into one subpart D entitled ``Actions under the 
Federal Securities Laws'' and reserves subparts E, F, and G. The OCC 
also applies this revised subpart D to Federal savings associations, 
removes Sec.  109.100(c), and makes other changes as described below.
19.120 Exemption Hearings Under Section 12(h) of the Securities 
Exchange Act of 1934
    The final rule moves the provisions in current subpart D of part 19 
to a new Sec.  19.120. Current subpart D governs informal hearings by 
the Comptroller to determine, pursuant to authority in sections 12(h) 
and (i) of the Exchange Act (15 U.S.C. 78l(h) and (i)), whether to 
exempt an issuer or a class of issuers from the provisions of sections 
12(g), 13, or 14 of the Exchange Act (15 U.S.C. 78l(g), 78m, or 78n) or 
whether to exempt any officer, director, or beneficial owner of 
securities of an issuer from section 16 of the Exchange Act (15 U.S.C. 
78p). This subpart currently covers issuers that are banks whose 
securities are registered pursuant to section 12(g) of the Exchange Act 
(15 U.S.C. 78l(g)). In addition to applying this provision to issuers 
that are Federal savings associations, the OCC is making a number of 
other changes:
    Specifically, the final rule clarifies that Sec.  19.120(a) applies 
to national bank and Federal savings association issued securities that 
may be subject to registration in addition to those securities already 
registered. This change permits a national bank or Federal savings 
association to obtain an exemption from the OCC in advance of 
registering.
    The final rule also provides that when an applicant provides a copy 
of its newspaper notice of an exemption hearing to its shareholders 
pursuant to Sec.  19.120(c) it must do so in the same manner as is 
customary for shareholder communications, which could be through 
electronic means. This change will make it easier and less burdensome 
to comply with this notice requirement.
    In addition, as in Sec. Sec.  19.35(c) and 19.112(d)(4), the final 
rule adds Sec.  19.120(d)(8), governing electronic presentations in the 
course of an Exchange Act-related hearing. This provision provides 
that, based on the circumstances of each hearing, the presiding officer 
may direct the use of, or any party may elect to use, an electronic 
presentation during the hearing. If the presiding officer requires an 
electronic presentation during the hearing, each party will be 
responsible for its own presentation and related costs unless the 
parties agree to another manner by which to allocate presentation 
responsibilities and costs. As indicated above, this new language is 
necessary to account for the routine use of electronic presentations in 
hearings that the existing rule does not currently address. The final 
rule makes a conforming change in Sec.  19.120(d)(6) to allow, by 
stipulation of the parties or by order of the presiding officer, a 
court reporter or other authorized person to administer the required 
oath to a witness remotely without being in the physical presence of 
the witness. Furthermore, the final rule clarifies in Sec.  
19.120(d)(9) that a transcript of the hearing may be provided by 
electronic means.
    Lastly, the OCC is making technical changes to Sec.  19.120. The 
final rule makes minor, non-substantive changes in provisions 
redesignated as paragraphs (b) and (c); removes passive sentence 
structure in text redesignated as paragraph (d)(9); allows for more 
than one applicant in provisions redesignated as paragraphs (d)(4) and 
(5) and (e); and changes references in this section to the ``Securities 
and Corporate Practices Division'' to ``Bank Advisory'' to reflect the 
reorganization of the OCC's Law Department.
19.121 Disciplinary Proceedings Involving the Federal Securities Laws
    The final rule moves the provisions in current subpart E of part 19 
to a new Sec.  19.121. Current subpart E governs proceedings by the 
Comptroller to determine whether to take disciplinary actions against 
banks that are transfer agents, municipal securities dealers, 
government securities brokers, government securities dealers, or 
persons associated with or seeking to become associated with these 
institutions.\13\ The final rule applies this section to Federal 
savings associations by defining ``bank'' to mean a national bank or 
Federal savings association, and, when referring to a government 
securities broker or government securities dealer, a Federal branch or 
agency of a foreign bank. In addition, the final rule defines 
``transfer agent,'' ``municipal securities dealer,'' ``government 
securities broker,'' ``government securities dealer,'' and person 
associated with a person engaged in these activities or with a bank 
engaged in these activities by cross-referencing to definitions in the 
Exchange Act. The final rule also makes technical changes to terms used 
in this section to correlate them more closely with terms used in the 
Exchange Act, including the addition to the scope of Sec.  19.121 of 
any person seeking to become associated with a government securities 
broker or government securities dealer.
---------------------------------------------------------------------------

    \13\ Pursuant to sections 3(a)(34)(G)(i) and 15C(c)(2)(A) of the 
Exchange Act (15 U.S.C. 78c(a)(34)(G)(i) and 78o-5(c)(2)(A)), the 
OCC also may take disciplinary actions against Federal branches and 
agencies of foreign banks that are government securities brokers or 
government securities dealers or persons associated with or seeking 
to become associated with these entities.
---------------------------------------------------------------------------

    Furthermore, the final rule removes the reference to the 
Comptroller's delegate in redesignated paragraph (a)(2). The definition 
of ``Comptroller'' in Sec.  19.3, which applies to Sec.  19.121, 
includes a person delegated to perform

[[Page 89828]]

the functions of the Comptroller of the Currency. Therefore, this 
reference is unnecessary.
    Lastly, the final rule replaces the term ``party'' with the more 
accurate term ``respondent'' in redesignated paragraphs (b)(1) and 
(c)(2).
19.122 Civil Money Penalty Authority Under Federal Securities Laws
    The final rule moves the provisions in current subpart F of part 19 
to a new Sec.  19.122. Current subpart F governs proceedings by the 
Comptroller to determine whether to impose a civil money penalty 
against banks that are transfer agents, municipal securities dealers, 
government securities brokers, government securities dealers, or 
persons associated with or seeking to become associated with these 
institutions.\14\ The final rule applies this provision to Federal 
savings associations by defining ``bank'' to mean a national bank or 
Federal savings association and, when referring to a government 
securities broker or government securities dealer, a Federal branch or 
agency of a foreign bank. The final rule also defines ``transfer 
agent,'' ``municipal securities dealer,'' ``government securities 
broker,'' ``government securities dealer,'' and person engaged in these 
activities or person associated with a bank engaged in these activities 
by cross-referencing to definitions in the Exchange Act. Lastly, as 
with Sec.  19.121, the final rule makes other technical changes to 
terms used in this section to correlate them more closely with terms 
used in the Exchange Act, including the addition of persons seeking to 
become associated with a government securities broker or government 
securities dealer to the scope of this section.
---------------------------------------------------------------------------

    \14\ Id.
---------------------------------------------------------------------------

19.123 Cease and Desist Authority
    The final rule moves the provisions in current subpart G of part 19 
to a new Sec.  19.123 and applies these provisions to both national 
banks and Federal savings associations. Current subpart G governs 
proceedings by the Comptroller to determine whether to initiate cease-
and-desist proceedings against a national bank for violations of 
sections 12, 13, 14(a), 14(c), 14(d), 14(f), and 16 of the Exchange Act 
(15 U.S.C. 78l, 78m, 78n(a), 78n(c), 78n(d), 78n(f), and 78p) or 
implementing regulations. The final rule also updates these provisions 
by adding violations enacted by, or rules or regulations enacted 
thereunder, the Sarbanes-Oxley Act in 2002, as amended,\15\ 
specifically, sections 301 \16\ (audit committees), 302 (corporate 
responsibility for financial reports), 303 (improper influence on 
conduct of audits), 304 (forfeiture of certain bonuses and profits), 
306 (insider trades during pension fund blackout periods), 401(b) 
(accuracy of financial reports), 404 (management assessment of internal 
controls), 406 (code of ethics for senior financial officers), and 407 
(disclosure of audit committee financial expert) \17\ (15 U.S.C. 78j-
1(m), 7241, 7242, 7243, 7244, 7261, 7262, 7264, and 7265).
---------------------------------------------------------------------------

    \15\ Public Law 107-204, 116 Stat. 745 (2002).
    \16\ Adding section 10A(m) to the Exchange Act.
    \17\ 15 U.S.C. 78j-1(m), 7241, 7242, 7243, 7244, 7261, 7262, 
7264, and 7265.
---------------------------------------------------------------------------

Subpart H--Change in Bank Control
    The Change in Bank Control Act (CBCA), which added section 7(j) to 
the FDIA (12 U.S.C. 1817(j)) and which the OCC has implemented at 12 
CFR 5.50, provides that no person may acquire control of an insured 
depository institution unless the appropriate Federal bank regulatory 
agency has been given prior written notice of the proposed acquisition. 
If, after investigating and soliciting comment on the proposed 
acquisition, the agency disapproves the acquisition, the agency must 
mail a written notification to the filer within three days of the 
decision. The filer may then request an agency hearing on the proposed 
acquisition within 10 days of receipt of the disapproval notice. The 
Uniform Rules in part 19, subpart A, and part 109, subpart A, apply to 
hearings for filers whose proposed acquisition of a national bank or 
Federal savings association, respectively, under the CBCA has been 
disapproved by the OCC. Current subpart H of part 19 provides 
additional hearing procedures for insured national banks. Section 5.50, 
which applies to both national banks and Federal savings associations, 
directs filers who wish to pursue a hearing for a disapproval decision 
to part 19, subpart H. However, subpart H refers only to national 
banks.
    Because 12 CFR 5.50 applies to both national banks and Federal 
savings associations, the final rule amends subpart H by adding 
language that makes the subpart specifically applicable to Federal 
savings associations in addition to national banks. Furthermore, 
because 12 CFR 5.50 applies to both insured and uninsured institutions 
and refers all filers who have been disapproved under Sec.  5.50 to the 
part 19 procedures, the final rule amends subpart H to make it also 
applicable to uninsured institutions. In addition, the final rule 
streamlines subpart H by removing a description of the CBCA disapproval 
process and instead cross-referencing to 12 CFR 5.50 in the scope of 
Sec.  19.160 and removing current paragraph (a) in Sec.  19.161, which 
contains provisions relating to disapproval notification that are 
duplicative of 12 CFR 5.50(f). The final rule also adds section 
headings to Sec.  19.160 and revises the section heading in Sec.  
19.161.
Subpart I--Discovery Depositions and Subpoenas
    Current subpart I of part 19 and Sec.  109.102 address the rules 
applicable to discovery depositions and subpoenas relating to national 
banks and Federal savings associations, respectively. These provisions 
are substantively similar but have slightly different wording. The 
final rule applies part 19, subpart I, to Federal savings associations 
and removes Sec.  109.102. The final rule also revises the phrase 
``direct knowledge of matters that are non-privileged, relevant, and 
material to the proceeding'' to ``direct knowledge of matters that are 
non-privileged and of material relevance to the proceeding.'' This 
change clarifies that persons being deposed have information of 
material relevance to the proceeding and is consistent with the 
requirements for document discovery in current and revised Sec.  
19.24(b). Furthermore, the final rule amends paragraph (a) to specify 
that a party also may take a deposition of a hybrid fact-expert witness 
in addition to an expert and a person, including another party, who has 
direct knowledge of matters that meet the standards of the paragraph, 
labeled as a ``fact witness'' by this amendment. This amendment defines 
a hybrid fact-expert witness as a fact witness who also will provide 
relevant expert opinion testimony based on the witness' training and 
experience.
    The final rule also adds paragraph (a)(1) to Sec.  19.170 to 
require a party to produce an expert report for any testifying expert 
or hybrid fact-expert witness before the witness' deposition and that, 
unless otherwise provided by the ALJ, the party must produce such 
report at least 20 days prior to the deposition. This new provision 
ensures that a deposing party has the benefit of the expert report 
prior to the deposition of an expert or hybrid fact-expert witness and 
that the deposing party has sufficient time to review the report prior 
to the deposition. Furthermore, paragraph (a)(2) of Sec.  19.170 
provides that respondents, collectively, are limited to a combined 
total of five depositions from all fact witnesses and

[[Page 89829]]

hybrid fact-expert witnesses. This paragraph also provides that 
Enforcement Counsel has the same deposition limit. This limit in the 
number of depositions adds efficiencies to the discovery process and 
prevents deposition requests from delaying the completion of the 
proceeding. Lastly, Sec.  19.170(a)(2) provides that a party is 
entitled to take a deposition of each expert witness designated by an 
opposing party, codifying the right of a party to depose the opposing 
party's designated expert witness.
    The final rule amends Sec.  19.170(b) to require that a deposition 
notice provide the manner for taking the deposition in addition to the 
time and place. The final rule also adds language to Sec.  19.170(b) to 
indicate that a deposition notice may require the witness to be deposed 
at any place within a State, territory, or possession of the United 
States or the District of Columbia in which that witness resides or has 
a regular place of employment or such other convenient place as agreed 
by the noticing party and the witness. Paragraph (b) also permits the 
parties to stipulate, or the ALJ to order, that a deposition be taken 
by telephone or other remote means. The OCC believes these changes make 
it easier and perhaps less costly for parties to obtain, and witnesses 
to provide, depositions, thereby improving the fact-finding process.
    In Sec.  19.170(c), the final rule provides that a party may take 
depositions no later than 20 days before the scheduled hearing date, 
instead of 10 days as in the current rule, except with permission of 
the ALJ for good cause shown. Increasing this time before a hearing 
will allow all parties more time to prepare for the hearing.
    As elsewhere in this rulemaking, the final rule amends Sec.  
19.170(d), Conduct of a deposition, to provide that, by stipulation of 
the parties or by order of the ALJ, a court reporter or other 
authorized person may administer the required oath to a deponent 
remotely without being in the physical presence of the deponent. This 
amendment updates the current oath requirement for witnesses to account 
for remote proceedings and conform this provision to Sec.  
19.170(b)(2), which allows depositions to be taken by telephone or 
other remote means.
    The final rule updates Sec.  19.170(e)(1)(i) to allow for the 
witness' testimony to be recorded by electronic means such as by a 
video recording device. The current rule only allows for recording by a 
stenotype machine and electronic sound recording device. This change 
reflects new technology and adds flexibility to the testimony process.
    Lastly, the final rule makes a non-substantive change to the 
heading in paragraph Sec.  19.170(a) and changes the heading of 
paragraph (g) from ``Fees'' to ``Expenses'' to describe more accurately 
the subject of the paragraph.
    With respect to Sec.  19.171, the final rule amends paragraph (a) 
to correct a cross-reference and conform the reference to a place 
located in the United States to that used elsewhere in part 19. The 
final rule also amends paragraph (b)(2), which requires the party 
serving a subpoena to file proof of service with the ALJ, to provide 
that this proof of service is not required if so ordered by the ALJ. 
The OCC is making this change because, in some OCC proceedings, the ALJ 
has indicated they did not wish to receive this proof of service. 
Finally, the final rule amends paragraph (c) to provide that any party, 
in addition to a person named in a subpoena, may file a motion to quash 
or modify the subpoena. This amendment ensures that a party has the 
right to seek to quash or modify a third-party deposition subpoena.
Subpart J--Formal Investigations
    Current subpart J of part 19 and part 112 address formal 
investigations against national banks and Federal savings associations, 
respectively. The final rule amends subpart J to make it applicable to 
both national banks and Federal savings associations and removes part 
112. Unlike the Federal savings association rule at Sec.  112.7(b), 
subpart J does not include a provision specifically providing for 
motions to quash subpoenas. The OCC has determined that it is neither 
necessary nor appropriate to include this provision in subpart J 
because the recipient may challenge investigative subpoenas in Federal 
court. However, the final rule adds a new paragraph (c) to Sec.  19.184 
of subpart J that is similar to the Federal savings association rule at 
Sec.  112.7(c). This new paragraph permits subpoenas that require the 
attendance and testimony of witnesses or the production of documents, 
including electronically stored information, to be served on any person 
or entity within any State, territory, or possession of the United 
States or the District of Columbia or as otherwise provided by law. 
This provision also subjects foreign nationals to subpoenas if service 
is made upon a duly authorized agent located in the United States or in 
accordance with international requirements for service of subpoenas. 
The existing rule for national banks is not clear on service of foreign 
nationals, and the adoption of specific language from the Federal 
savings association rule will eliminate the disputes that previously 
have arisen on this issue. Furthermore, the addition of language 
regarding international subpoena requirements codifies existing OCC 
practice.
    The final rule makes further changes to subpart J. First, the final 
rule amends Sec.  19.181, Confidentiality of formal investigations. 
Currently, this provision provides that information or documents 
obtained in the course of a formal investigation are confidential and 
may be disclosed only in accordance with the provisions of 12 CFR part 
4. The final rule describes in more detail the information or documents 
that are confidential to better ensure the confidentiality of formal 
investigations. Specifically, amended Sec.  19.181 states that the 
entire record of any formal investigative proceeding, including the 
resolution or order of the Comptroller authorizing or terminating the 
proceeding; all subpoenas issued by the OCC during the investigation; 
and all information, documents, and transcripts obtained by the OCC in 
the course of a formal investigation, are confidential and may be 
disclosed only in accordance with the provisions of part 4. The final 
rule also adds that this information may be disclosed pursuant to the 
OCC discovery obligations under subpart A of part 19.
    Second, the final rule amends Sec.  19.182, Order to conduct a 
formal investigation, to clarify the list of actions persons authorized 
to conduct an investigation may take. Currently, this section provides 
that these persons may, among other things, issue subpoenas duces 
tecum, administer oaths, and receive affirmations as to any matter 
under investigation by the Comptroller. The final rule adds that these 
authorized persons also may take or cause to be taken testimony under 
oath, issue subpoenas other than subpoenas duces tecum, and modify 
subpoenas. This amendment makes Sec.  19.182 more consistent with the 
powers enumerated in the relevant underlying statutes, including 12 
U.S.C. 1818(n) and 1820(c). The final rule also makes a technical 
correction to indicate that authorized persons may administer 
affirmations rather than receive affirmations. Section 19.182 also 
currently provides that, upon application and for good cause, the 
Comptroller may limit, modify, or withdraw the order at any stage of 
the proceedings. The final rule clarifies that the Comptroller may also 
terminate the order. Finally, the final rule amends Sec.  19.182 to 
specifically indicate that the persons conducting the investigation are 
empowered by the Comptroller to do so.

[[Page 89830]]

    Third, the final rule amends Sec.  19.183, Rights of witnesses. 
Current paragraph (a) provides that any person who is compelled or 
requested to furnish testimony, documentary evidence, or other 
information with respect to any matter under formal investigation must, 
on request, be shown the order initiating the investigation. The final 
rule amends this provision to provide that such persons may not retain 
copies of the order without first receiving written approval of the 
OCC. This amendment ensures the confidentiality of the order.
    Current Sec.  19.183(b) provides that a person testifying in a 
formal investigation may be accompanied, represented, and advised by 
counsel, and indicates that this right to counsel means that the 
attorney may be present at all times while the person is testifying and 
that the attorney may, among other things, question the person briefly 
at the conclusion of the testimony to clarify answers and make summary 
notes during the testimony solely for use of the person testifying. The 
final rule amends this description of permissible attorney activities 
to provide that the attorney's questioning of the person may be on the 
record. This ensures a more complete formal record of the proceeding. 
In addition, the final rule provides that the notes taken by the 
attorney during testimony may be used solely in representing the 
person. This change allows the attorney to use these notes and not 
restrict use of the notes to the person testifying, thereby enabling 
the attorney to better represent their client.
    Section 19.183(c) provides that any person who has given or will 
give testimony and counsel representing the person may be excluded from 
the proceedings during the taking of testimony of any other witness. 
The final rule amends this provision to specify that such person and 
counsel may be excluded during the testimony of any other person at the 
discretion of the OCC or the OCC's designated representative. 
Furthermore, the final rule provides that neither attorney(s) for the 
institution(s) affiliated with the testifying person nor attorneys for 
any other interested persons have any right to be present during the 
testimony of any person not personally represented by such attorney. 
These changes ensure the confidentiality and integrity of the 
proceeding by mitigating conflicts of interest and clarify that it is 
the OCC or OCC's designated representative who makes the decision on 
exclusion.
    Current Sec.  19.183(d) provides that any person who is compelled 
to give testimony is entitled to inspect any transcript that has been 
made of the testimony but may not obtain a copy if the Comptroller's 
representatives conducting the proceedings have cause to believe that 
the contents should not be disclosed pending completion of the 
investigation. The final rule removes the burden of proving ``cause'' 
included in this provision, as the OCC finds this unnecessary. The 
final rule also eliminates the language that limits the release of the 
transcript pending completion of the investigation because the reasons 
for not disclosing the transcript may persist beyond the conclusion of 
any pending investigation.
    Current Sec.  19.183(e) provides that any designated representative 
conducting an investigative proceeding must report to the Comptroller 
any instances where a person has been guilty of dilatory, 
obstructionist, or insubordinate conduct during the course of the 
proceeding or any other instance involving a violation of this part. As 
this paragraph does not pertain to rights of witnesses, and to make 
clear that this provision applies to all formal investigations covered 
by subpart J, the final rule redesignates this paragraph as a new Sec.  
19.185. The final rule also replaces the phrase ``has been guilty of'' 
with ``has engaged in'' in the redesignated paragraph because the 
phrase ``has been guilty of'' is unclear in the context of this 
provision. Furthermore, the OCC does not believe it is appropriate for 
a person to be found guilty of this behavior before the designated 
representative reports this person to the OCC. With this change, the 
OCC may investigate or take other action with respect to this 
individual to ensure the fairness and accuracy of the proceeding in a 
more timely manner. This change also conforms the scope of this 
provision with the scope of a similar provision, Sec.  19.197, which 
involves the reporting of certain conduct of an individual practicing 
before the OCC.
    Fourth, the final rule amends Sec.  19.184, Service of subpoena and 
payment of witness expenses, by removing the specific language in 
paragraph (b) regarding the payment of witnesses and instead cross-
referencing to the more detailed rule for witness payments contained in 
revised Sec.  19.14, discussed previously.
    Lastly, the final rule makes a number of technical changes to 
subpart J. Specifically, the final rule replaces references to ``the 
Comptroller'' with ``the OCC'' in Sec.  19.183(b) and (d) and in 
redesignated Sec.  19.185 and replaces the term ``representatives'' 
with ``designated representatives'' in Sec.  19.183(d)'' to align the 
provisions more closely with the statute. The final rule also removes 
the references to the ``Comptroller's delegate'' in Sec. Sec.  19.180 
and 19.182 as the definition of ``Comptroller'' in Sec.  19.3, which 
applies to subpart J, includes a person delegated to perform the 
functions of the Comptroller of the Currency. In addition, the final 
rule adds a reference to Federal branches and agencies in Sec.  19.180 
to more completely describe those entities that are subject to the 
OCC's examination authority. Finally, the final rule adds section 
headings to Sec.  19.183.
Subpart K--Parties and Representational Practice Before the OCC; 
Standards of Conduct
    Current subpart K of part 19 contains rules relating to parties and 
representational practice before the OCC. The final rule makes mostly 
technical changes to this subpart.
    First, in Sec.  19.190, Scope, the final rule makes a confirming 
change to a cross-reference to reflect this rulemaking's amendments to 
subpart D.
    Second, the final rule amends the definition of ``practice before 
the OCC'' in Sec.  19.191, Definitions. Currently, the OCC defines the 
term to include any matters connected with presentations to the OCC or 
any of its officers or employees relating to a client's rights, 
privileges, or liabilities under laws or regulations administered by 
the OCC. The final rule clarifies this statement so that it applies to 
both written and oral presentations. Section 19.191 also provides that 
the term ``practice before the OCC'' does not include work prepared for 
a bank solely at its request for use in the ordinary course of its 
business. The final rule amends this statement so that it also includes 
work prepared for a Federal savings association and a Federal branch or 
agency of a foreign bank, and changes ``bank'' to ``national bank.'' 
These changes are part of the OCC's application of part 19 to Federal 
savings associations and the OCC's specific inclusion of Federal 
branches and agencies in part 19 to clarify the application of part 19 
to all entities supervised by the OCC.
    Third, the final rule amends Sec.  19.194, Eligibility of attorneys 
and accountants to practice, by removing the phrase ``who is qualified 
to practice as an attorney'' in paragraph (a) and the phrase ``who is 
qualified to practice as a certified public accountant or public 
accountant'' in paragraph (b). Section 19.191 defines the terms 
``attorney'' and ``accountant'' and these definitions reference 
qualification requirements. Therefore, these phrases are superfluous.

[[Page 89831]]

    Fourth, the final rule amends Sec.  19.196, Disreputable conduct, 
which provides a nonexclusive list of disreputable conduct for which an 
individual may be censured, debarred, or suspended from practice before 
the OCC. Paragraph (d) of this section includes on this list disbarment 
or suspension from practice as an attorney or as a certified public 
accountant or public accountant by any duly constituted authority of 
any State, possession, or commonwealth of the United States or the 
District of Columbia for the conviction of a felony or misdemeanor 
involving moral turpitude in matters relating to the supervisory 
responsibilities of the OCC, where the conviction has not been reversed 
on appeal. The final rule deletes the phrase ``in matters relating to 
the supervisory responsibilities of the OCC'' so as not to limit the 
felony or misdemeanor conviction to only OCC-related matters. The OCC 
believes that an individual engaged in any of the conduct listed in 
this section, whether or not related to OCC supervisory matters, should 
not practice before the OCC.
    Fifth, the final rule replaces the reference to the OTS in Sec.  
19.196(g) with ``the former OTS,'' as the OTS no longer exists.
    Sixth, the final rule amends Sec.  19.197, which provides the 
standards and rules for initiating disciplinary proceedings. Paragraph 
(a) of this section provides that an individual, including any employee 
of the OCC, who has reason to believe that an individual practicing 
before the OCC in a representative capacity has engaged in any conduct 
that would serve as a basis for censure, suspension, or debarment under 
Sec.  19.192 (such as contemptuous conduct, materially injuring or 
prejudicing another party, violating a law or order, or unduly delaying 
proceedings) may report this conduct to the OCC or a person delegated 
to receive this information by the Comptroller. The final rule broadens 
the application of this paragraph to conduct under all of subpart K, 
which includes incompetence (Sec.  19.195) and disreputable conduct 
(Sec.  19.196), instead of conduct only under Sec.  19.192. The OCC 
believes that an individual found to be incompetent or to have engaged 
in disreputable conduct also should be subject to a disciplinary 
proceeding under this section.
    Seventh, the final rule amends Sec.  19.198, Conferences, to add 
the terms ``censure'' in paragraph (a) and ``debarment'' in paragraph 
(b) to correct missing references. The final rule also changes the 
heading on Sec.  19.198(b) from ``Resignation or voluntary suspension'' 
to ``Voluntary suspension or debarment'' so that it more accurately 
reflects the subject of the paragraph.
    Eighth, the final rule amends Sec.  19.200(a), which provides that 
if the final order against the respondent is for debarment the 
individual may not practice before the OCC unless otherwise permitted 
to do so by the Comptroller, by clarifying that the Comptroller's 
permission to permit such practice is pursuant to Sec.  19.201. Section 
19.201 provides that the Comptroller may entertain a petition for 
reinstatement after the expiration of the time period designated in the 
order of debarment and that the Comptroller may grant reinstatement 
only if satisfied that the petitioner is likely to act in accordance 
with part 19 and if granting reinstatement would not be contrary to the 
public interest. Section 19.201 further provides that any request for 
reinstatement is limited to written submissions unless the Comptroller, 
in their discretion, affords the petitioner a hearing. The amendment 
merely confirms that a debarred respondent only may be reinstated 
pursuant to the process set forth in Sec.  19.201. It makes no 
substantive change. The final rule also revises the heading of Sec.  
19.200 to reflect the order of topics covered by the section.
    Ninth, the final rule removes the references to the ``Comptroller's 
delegate'' in Sec. Sec.  19.197(b) and (c), 19.199, and 19.200(d) as 
the definition of ``Comptroller'' in Sec.  19.3, which applies to 
subpart K, includes a person delegated to perform the functions of the 
Comptroller of the Currency.
    Finally, the final rule makes several minor, nonsubstantive wording 
changes throughout subpart K. In Sec.  19.192(c), the NPR instruction 
stated that the OCC would replace the phrase ``administrative law 
judge'' with ``ALJ'' in one instance. The final rule replaces that 
phrase each time it appears in that section.
Subpart L--Equal Access to Justice Act
    In general, EAJA,\18\ codified at 5 U.S.C. 504, authorizes the 
payment of attorney's fees and other expenses to eligible parties who 
prevail over the United States in certain adversary adjudications, 
absent a showing by the government that its position was substantially 
justified or that special circumstances make an EAJA award unjust. EAJA 
requires each agency to issue rules that establish uniform procedures 
for the submission and consideration of applications for an EAJA 
award.\19\ The OCC currently meets this requirement in subpart L of 
part 19, which provides that EAJA implementing regulations promulgated 
by the U.S. Department of the Treasury (Treasury), set forth at 31 CFR 
part 6, are applicable to formal adjudicatory proceedings under part 
19. The final rule deletes the cross-reference to the Treasury 
regulation and amends subpart L to set forth EAJA regulations 
specifically applicable to certain OCC adversary adjudications 
conducted under part 19.
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    \18\ Public Law 96-481, title II, sec. 203(a)(1), (c) (1980), 
revived and amended Public Law 99-80, sec. 1, 6 (1985).
    \19\ 5 U.S.C. 504(c)(1). EAJA also requires that each agency 
issue its EAJA rule after consultation with the Chairman of ACUS. 5 
U.S.C. 504(c)(1). Pursuant to instructions provided by ACUS in the 
preamble to the ACUS Model Rule, see 84 FR 38934, the OCC notified 
the Office of the Chairman of ACUS of the proposed rule. ACUS did 
not suggest any changes to the OCC's proposal.
---------------------------------------------------------------------------

    The OCC has based subpart L on the revised model rule implementing 
EAJA published in 2019 by the Administrative Conference of the United 
States (ACUS) (ACUS Model Rule).\20\ As discussed below, the OCC has 
customized subpart L in certain places to reflect the OCC's procedures 
in adversary adjudications, reorganized a few provisions included in 
the ACUS Model Rule, made other changes based on the Treasury EAJA rule 
as well as the EAJA rules of the Board and FDIC,\21\ and made non-
substantive grammatical or stylistic changes. Although the Treasury, 
Board, and FDIC EAJA rules are based on earlier versions of the ACUS 
Model Rule, the OCC believes that these provisions remain useful and 
clarify the application of EAJA to OCC adversary proceedings.
---------------------------------------------------------------------------

    \20\ 84 FR 38934 (Aug. 18, 2019). ACUS originally issued an EAJA 
model rule in 1981 (46 FR 32900 (June 25, 1981)) and previously 
revised its model rule in 1986 (51 FR 16659 (May 6, 1986) 
(previously codified at 1 CFR part 315)). ACUS issued its model rule 
to assist agencies when adopting their EAJA rules and encourages 
agencies to set out and implement this model rule as part of their 
own EAJA rules. Id. The Treasury EAJA rule is based on the 1981 EAJA 
model rule.
    \21\ 12 CFR part 263, subpart G (Board) and 12 CFR part 308, 
subpart P (FDIC). Both the Board and FDIC EAJA rules are based on 
the earlier versions of the ACUS model rule.
---------------------------------------------------------------------------

Authority and Scope; Waiver
    Section 19.205 describes the general purpose and scope of EAJA. 
Specifically, an eligible party may receive an award of attorney fees 
and other expenses when it prevails over an agency in certain 
administrative proceedings (adversary adjudications) unless the 
agency's position was substantially justified or special circumstances 
make an award unjust. Furthermore, as provided in the Treasury 
regulations, and as determined

[[Page 89832]]

by EAJA caselaw, this provision provides that no presumption under this 
subpart arises that the agency's position was not substantially 
justified because the agency did not prevail.\22\
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    \22\ See 31 CFR 6.5. See also, e.g., Pierce v. Underwood, 487 
U.S. 552 (1988); Miles v. Bowen, 632 F. Supp. 282 (M.D. Ala. 1986).
---------------------------------------------------------------------------

    The final rule does not contain the provision in the ACUS Model 
Rule that permits an eligible party, even if not a prevailing party, to 
receive an award under EAJA when it successfully defends against an 
excessive demand made by the agency. Although EAJA permits excessive 
demand awards, EAJA specifically provides that excessive demand awards 
be paid ``only as a consequence of appropriations provided in 
advance.'' \23\ Because the OCC is not an appropriated agency and 
instead receives its funding through assessments on the institutions it 
regulates, the OCC believes that this EAJA excessive demand provision 
does not apply to the OCC. Consequently, the final rule does not 
include provisions in the ACUS Model Rule specifically related to 
excessive demand awards.
---------------------------------------------------------------------------

    \23\ 5 U.S.C. 504(a)(4).
---------------------------------------------------------------------------

    As provided in Sec.  19.205(b), the OCC has determined that 
proceedings listed in Sec. Sec.  19.1, 19.110, 19.120, 19.190, 19.230, 
and 19.241 meet EAJA's definition of ``adjudicatory adjudications'' and 
are covered by subpart L.
    Section 19.205(c) provides that after reasonable notice to the 
parties, the presiding officer or the OCC may waive, for good cause 
shown, any provision contained in subpart L as long as the waiver is 
consistent with the terms and purpose of EAJA. Although this provision 
is not included in the ACUS Model Rule, the OCC finds that this 
provision provides useful discretion to the presiding officer and the 
OCC, as relevant, during the EAJA process and provides for the smoother 
conduct of EAJA proceedings should Congress subsequently amend EAJA and 
the OCC has not yet updated its corresponding EAJA implementing 
regulations.
Definitions
    Section 19.206 sets forth definitions of terms used in this 
subpart. Unless otherwise noted, these definitions are substantively 
identical to the definitions in the ACUS Model Rule and based on the 
definitions in EAJA.
    Section 19.206(a) defines ``adversary adjudication'' to mean an 
adjudication under 5 U.S.C. 554 in which the position of the OCC is 
represented by Enforcement Counsel.\24\ With certain exceptions, 
section 554 applies to adjudications required by statute to be 
determined on the record after opportunity for an agency hearing.\25\ 
Unlike EAJA and the ACUS Model Rule, the final rule does not 
specifically exclude from this definition adjudications related to 
setting rates, licensing decisions, contract appeals, and the Religious 
Freedom Restoration Act of 1993.\26\ These categories of adjudications 
are not covered by part 19 and therefore a specific exclusion in the 
OCC rule is not necessary.
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    \24\ See 5 U.S.C. 504(b)(1)(C) and Sec.  2.01(b) of the ACUS 
Model Rule.
    \25\ Section 554 of title 5 does not apply to: (1) a matter 
subject to a subsequent trial of the law and the facts de novo in a 
court; (2) the selection or tenure of an employee, except a [sic] 
administrative law judge appointed under section 3105 of this title; 
(3) proceedings in which decisions rest solely on inspections, 
tests, or elections; (4) the conduct of military or foreign affairs 
functions; (5) cases in which an agency is acting as an agent for a 
court; or (6) the certification of worker representatives. 5 U.S.C. 
554(a).
    \26\ EAJA and the ACUS Model Rule specifically exclude: (1) an 
adjudication for the purpose of establishing or fixing a rate or for 
the purpose of granting or renewing a license; (2) any appeal of a 
decision made pursuant to section 7103 of title 41 before an agency 
board of contract appeals as provided in section 7105 of title 41; 
(3) any hearing conducted under chapter 38 of title 31; and (4) the 
Religious Freedom Restoration Act of 1993.
---------------------------------------------------------------------------

    Section 19.206(b) defines ``final disposition'' as the date on 
which a decision or order disposing of the merits of the proceeding, or 
any other complete resolution of the proceeding such as a settlement or 
voluntary dismissal becomes final and unappealable, both within the OCC 
and to the courts.\27\
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    \27\ See Sec.  2.01(e) of the ACUS Model Rule.
---------------------------------------------------------------------------

    Section 19.206(c) defines ``party'' to mean a party, defined in 5 
U.S.C. 551(3),\28\ that is (1) an individual whose net worth did not 
exceed $2,000,000 at the time that the adversary adjudication was 
initiated; or (2) any owner of an unincorporated businesses, or any 
partnership, corporation, unit of local government or organization with 
a net worth not exceeding $7,000,000 and no more than 500 employees at 
the time that the adversary adjudication was initiated, except that the 
net worth limitation does not apply to certain tax-exempt organizations 
described in section 501(c)(3) of the Internal Revenue Code of 1986 or 
a cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act.\29\ This definition also provides that the 
net worth and number of employees of the applicant and, where 
appropriate, any of its affiliates must be aggregated when determining 
the applicability of this definition. The OCC is including this 
aggregation provision, which is not included in the ACUS Model Rule, 
because, as discussed below, the final rule requires information on 
affiliates for certain parties.
---------------------------------------------------------------------------

    \28\ Section 551(3) defines ``party'' to include a person or 
agency named or admitted as a party, or properly seeking and 
entitled as of right to be admitted as a party, in an agency 
proceeding, and a person or agency admitted by an agency as a party 
for limited purposes.
    \29\ See 5 U.S.C. 504(b)(1)(B) and Sec.  2.01(f) of the ACUS 
Model Rule.
---------------------------------------------------------------------------

    Section 19.206(d) defines ``position of the OCC'' to mean the OCC's 
position in an adversary adjudication as well as the action or failure 
to act by the OCC upon which the adversary adjudication is based. This 
paragraph also provides that fees and other expenses may not be awarded 
to a party for any portion of the adversary adjudication if the party 
has unreasonably drawn out the proceeding.\30\
---------------------------------------------------------------------------

    \30\ See 5 U.S.C. 504(b)(1)(E) and Sec.  2.01(g) of the ACUS 
Model Rule.
---------------------------------------------------------------------------

    Section 19.206(e) defines ``presiding officer'' as an official, 
whether an ALJ or otherwise, that presided over the adversary 
adjudication or the official presiding over an EAJA proceeding.\31\ As 
noted below in Sec.  19.207, upon receipt of an EAJA application, the 
OCC will, to the extent feasible, refer the matter to the official who 
heard the underlying adversary adjudication.
---------------------------------------------------------------------------

    \31\ See the definition of ``adjudicative officer'' in 5 U.S.C. 
504(b)(1)(D) and Sec.  2.01(a) of the ACUS Model Rule. The OCC has 
chosen to use the term ``presiding officer'' instead of 
``adjudicative officer'' as that is the term used elsewhere in part 
19.
---------------------------------------------------------------------------

Application Requirements
    Section 19.207 sets out application requirements for a party 
seeking an award under EAJA. This section requires a party to file an 
application with the OCC within 30 days after the OCC's final 
disposition of the adversary adjudication. It also requires the 
application to include (1) the identity of the applicant and the 
adjudicatory proceeding for which an award is sought; (2) a showing 
that the applicant has prevailed and identification of the OCC position 
that the applicant alleges was not substantially justified; (3) the 
basis for the applicant's belief that the position was not 
substantially justified; (4) unless the applicant is an individual, the 
number of employees of the applicant and a brief description of the 
type and purpose of the organization or business; (5) a showing of how 
the applicant meets the definition of ``party'' under Sec.  19.206(c), 
including documentation of net worth pursuant to Sec.  19.208; (6) 
documentation of the fees and expenses sought per Sec.  19.209; (7) 
signature by the applicant or the applicant's authorized officer or 
attorney; (8) any other matter the applicant wishes the OCC to consider 
in determining whether and in what

[[Page 89833]]

amount an award should be made; and (9) written verification under 
penalty of perjury that the information contained in the information 
provided is true and correct. These application requirements are based 
on Sec.  3.01 of the ACUS Model Rule,\32\ except for the provision, 
taken from the Treasury rule,\33\ providing that the applicant may 
include other matters for the OCC to consider. The OCC believes that 
this further information could assist the presiding officer when 
reviewing the EAJA claim and, by including this information at the 
application stage, may make the EAJA process more efficient.
---------------------------------------------------------------------------

    \32\ See also 5 U.S.C. 504(a)(2).
    \33\ 31 CFR 6.8(d).
---------------------------------------------------------------------------

    Although not included in EAJA or the ACUS Model Rule, Sec.  
19.207(c) provides that, upon receipt of an EAJA application, the OCC 
will to the extent feasible refer the matter to the official who heard 
the underlying adversary adjudication. The OCC believes that the 
official presiding over the adversary proceeding subject to the EAJA 
application is in the best position to review the EAJA application.
Net Worth Exhibit
    Section 19.208 requires specific net worth documentation to 
accompany certain EAJA applications. This documentation is necessary to 
determine whether the applicant meets the definition of ``party'' under 
Sec.  19.206(c) and therefore may be eligible for an EAJA award. 
Paragraph (a) requires an applicant, other than an applicant that is a 
non-profit or a cooperative association, to provide with its EAJA 
application a detailed exhibit of the applicant's, and where 
applicable, any of its affiliates', net worth at the time the adversary 
adjudication was initiated. Unless otherwise required, this paragraph 
permits this exhibit to be in any form convenient to the applicant that 
provides full disclosure of the applicant's and affiliates' assets and 
liabilities sufficient to determine whether the applicant qualifies 
under the standards of this subpart. Furthermore, this paragraph 
permits a presiding officer to require an applicant to file additional 
information to determine its eligibility for an award. These net worth 
exhibit requirements are taken from Sec.  3.02 of the ACUS Model Rule, 
except that the final rule requires the net worth information from 
affiliates, where appropriate. Because of the structure and 
interrelatedness of many financial institutions, the OCC believes that 
affiliate net worth will often prove relevant when determining 
eligibility for an EAJA award. The OCC notes that the EAJA rules issued 
by Treasury, the Board, and the FDIC require net worth information from 
affiliates to determine eligibility under EAJA.\34\
---------------------------------------------------------------------------

    \34\ See 31 CFR 6.4(f) (Treasury); 12 CFR 263.105 (Board); and 
12 CFR 308.177 (FDIC).
---------------------------------------------------------------------------

    Section 19.208 also includes further provisions included in the 
Board's and the FDIC's EAJA regulations but not included in the ACUS 
Model Rule.\35\ These provisions provide more detailed information as 
to what the OCC will accept in satisfaction of the net worth exhibit 
requirement or pertain specifically to national banks and Federal 
savings associations. Specifically, paragraph (a)(1) permits the use of 
unaudited financial statements for individual applicants as well as 
certain financial statements or reports submitted to a Federal or State 
agency for determining individual net worth, unless the presiding 
officer or the OCC otherwise requires. For applicants or affiliates 
that are not banks or savings associations, paragraph (a)(2) provides 
that net worth will be considered to be the excess of total assets over 
total liabilities as of the date the underlying proceeding was 
initiated. For banks and savings associations, paragraph (a)(3) 
requires the submission of a Consolidated Report of Condition and 
Income (Call Report) and provides that net worth is the total equity 
capital as reported in the Call Report filed for the last reporting 
date before the initiation of the proceeding.
---------------------------------------------------------------------------

    \35\ Id.
---------------------------------------------------------------------------

    Similar to Sec.  3.02 of the ACUS Model Rule, paragraph (b) 
provides that the net worth exhibit will be included in the public 
record of the proceeding unless an applicant believes that there are 
legal grounds for withholding it from disclosure and requests that the 
documents be filed under seal or otherwise treated as confidential.
Documentation of Fees and Expenses
    As provided in Sec.  3.03 of the ACUS Model Rule, Sec.  19.209 
requires applications to be accompanied by adequate documentation of 
the fees and other expenses incurred after initiation of the adversary 
adjudication. This information is necessary to determine any EAJA 
award. Specifically, this section requires a separate itemized 
statement for each professional firm or individual whose services are 
covered by the application showing the hours spent in connection with 
the proceeding by each individual, a description of the specific 
services provided, the rate at which each fee has been computed, any 
expenses for which reimbursement is sought, the total amount claimed, 
and the total amount paid or payable by the applicant or by any other 
person or entity for the services provided. This section also 
authorizes a presiding officer to require an applicant to provide 
vouchers, receipts, or other substantiation for any fees or expenses 
claimed.
    Unlike the ACUS Model Rule, this provision also provides that an 
application seeking an increase in fees to account for inflation 
pursuant to Sec.  19.215(d)(1)(i), discussed below, also must include 
adequate documentation of the change in the consumer price index for 
the attorney or agent's locality.
Filing and Service of Documents
    As in Sec.  4.01 of the ACUS Model Rule, Sec.  19.210 requires 
applications for an award, or any accompanying documentation related to 
an application, to be filed and served on all parties to the proceeding 
in accordance with Sec.  19.11, Service of papers, except for 
confidential information pursuant to Sec.  19.208(b).
Answer to Application
    As provided in Sec.  4.02 of the ACUS Model Rule, Sec.  19.211 
provides that Enforcement Counsel may file an answer to an EAJA 
application within 30 days after service of the application except in 
cases involving settlement negotiations under Sec.  19.213. This 
section provides that failure to file an answer within 30 days may be 
treated as consent to the award requested unless Enforcement Counsel 
requests an extension of time for filing or files a statement of intent 
to negotiate a settlement under Sec.  19.213. This section requires the 
answer to explain in detail any objections to the award requested and 
identify the facts supporting Enforcement Counsel's position. For any 
facts not already in the record of the proceeding, this section 
requires Enforcement Counsel to provide supporting affidavits or a 
request for further proceedings under Sec.  19.214 with the answer. 
Unlike the ACUS Model Rule, Sec.  19.211 does not include information 
related to settlement negotiations and instead cross-references to 
Sec.  19.213, which discusses settlement of an EAJA award. The OCC 
believes that, for ease of use, all settlement provisions should be 
included in the same section of the regulation.
Reply
    As in Sec.  4.03 of the ACUS Model Rule, Sec.  19.212 permits an 
applicant to reply within 15 days after service of an answer. For facts 
not already in the

[[Page 89834]]

record, the applicant is required to provide supporting affidavits or a 
request for further proceedings pursuant to Sec.  19.214 with the 
answer.
Settlement
    As in Sec.  4.04 of the ACUS Model Rule, Sec.  19.213 provides that 
the applicant and Enforcement Counsel may agree to a proposed 
settlement before final action on the application, either in connection 
with a settlement of the underlying proceeding or after conclusion of 
an underlying proceeding, in accordance with the OCC's standard 
settlement procedure pursuant to Sec.  19.15, Opportunity for informal 
settlement. In a case where a prevailing party and Enforcement Counsel 
agree on a proposed settlement of an award before an EAJA application 
has been filed, this section requires the application to be filed with 
the proposed settlement. Section 19.213 also clarifies that, if a 
proposed settlement of an underlying proceeding provides for each side 
to pay its own expenses and the settlement is accepted, no application 
under this subpart may be filed. However, this section differs from 
Sec.  4.04 of the ACUS Model Rule by including a provision the ACUS 
Model Rule includes in its section relating to an answer to an 
application, Sec.  4.02. Specifically, Sec.  19.213 specifies that, if 
after an application is submitted, Enforcement Counsel and the 
applicant believe that they can reach a settlement, they may file a 
joint statement of their intent to negotiate a settlement. Filing this 
statement will extend the time for filing an answer under Sec.  19.211 
for an additional 30 days. Further extensions could be granted by the 
presiding officer at the joint request of the applicant and Enforcement 
Counsel. As with Sec.  19.211, the OCC believes that this provision is 
better placed in Sec.  19.213 so that all settlement information is 
included in the same section of the regulation.
Further Proceedings
    Ordinarily, the determination of an EAJA award would be made on the 
basis of the written record. However, Sec.  19.214(a) permits an 
applicant or Enforcement Counsel to request the filing of additional 
written submissions, an informal conference, oral argument, discovery, 
or an evidentiary hearing with respect to issues other than whether the 
OCC's position was substantially justified, such as issues involving 
the applicant's eligibility or substantiation of fees or expenses. The 
presiding officer may permit these further proceedings if necessary for 
a full and fair decision on the application. The presiding officer also 
may order these additional proceedings on its own initiative. In 
addition, paragraph (a) requires that further proceedings be held as 
promptly as possible so as not to delay resolution of the EAJA 
application. The final rule lists applicant eligibility or 
substantiation of fees and expenses as examples of permissible issues 
for further proceedings. Paragraph (a) is based on Sec.  4.05 of the 
ACUS Model Rule. However, Sec.  19.214 does not contain the ACUS Model 
Rule's statement regarding the basis for a decision on whether the 
OCC's position was substantially justified. The OCC believes it is more 
appropriate to include this statement in Sec.  19.215, Decision. In 
addition, to compile a more complete list of all available further 
proceedings, the final rule also permits the applicant or Enforcement 
Counsel to request an informal conference, which is not listed in the 
ACUS Model Rule.
    As in Sec.  4.05 of the ACUS Model Rule, Sec.  19.214(b) requires 
that any request for further proceedings specifically identify the 
information sought or any disputed issues and explain why additional 
proceedings are necessary to resolve the issues.
Decision
    The final rule's section on EAJA decisions, Sec.  19.215, is based 
on 5 U.S.C. 504(a)(3) and in part on Sec.  4.06 of the ACUS Model Rule. 
Section 19.215(a) provides that a presiding officer must base its 
decision on whether the position of the OCC was substantially justified 
on the administrative record as a whole of the adversary adjudication 
for which fees and other expenses are sought. The ACUS Model Rule 
includes this provision in its section on further proceedings, Sec.  
19.214. However, the OCC believes this requirement better belongs in 
the section of the regulation outlining EAJA decisions because it 
provides parameters for the presiding officer's decision.
    As in Sec.  4.06 of the ACUS Model Rule, Sec.  19.215(b) mandates 
the timing of the presiding officer's decision. It requires the 
presiding officer to issue a recommended decision in writing on an EAJA 
application within 90 days after the time for filing a reply or within 
90 days of the completion of further proceedings held pursuant to Sec.  
19.214.\36\
---------------------------------------------------------------------------

    \36\ The ACUS Model Rule provides that an agency may determine 
the specific time period for this section.
---------------------------------------------------------------------------

    Also, as in Sec.  4.06 of the ACUS Model Rule, paragraph (c) of 
Sec.  19.215 provides that a decision must include written findings and 
conclusions on an applicant's eligibility and status as a prevailing 
party. The decision also must include, if applicable, an explanation of 
the reasons for any difference between the amount requested and the 
amount awarded, findings on whether the Enforcement Counsel's or OCC's 
position was substantially justified, whether the applicant unduly and 
unreasonably protracted the proceedings, or whether special 
circumstances make an award unjust. Paragraph (c) differs from Sec.  
4.06 of the ACUS Model Rule in that it includes language taken from 
Sec.  4.05 of the ACUS Model Rule. Specifically, paragraph (c) provides 
that the presiding officer must determine whether or not the position 
of the OCC was substantially justified on the basis of the 
administrative record as a whole of the adversary adjudication for 
which fees and other expenses are sought. The OCC believes this 
provision is a better fit in the section of the regulation outlining 
EAJA decisions.
    Section 19.215(d) provides the requirements for EAJA decisions. 
Paragraphs (d)(1), (2) and (3) of Sec.  19.215 are not included in the 
ACUS Model Rule but are based on the EAJA statute, provisions included 
in the FDIC and Board EAJA rules,\37\ and provisions included in the 
prior ACUS Model Rule that ACUS determined were largely substantive 
matters beyond the Conference's statutory charge.\38\ The OCC believes 
that these provisions provide important details on the basis for EAJA 
award amounts that should apply to all EAJA applications and be 
included in its EAJA regulation.
---------------------------------------------------------------------------

    \37\ 12 CFR 263.106, 308.175.
    \38\ See 84 FR 38934.
---------------------------------------------------------------------------

    Specifically, Sec.  19.215(d)(1) provides that EAJA awards may 
include the reasonable expenses of expert witnesses; the reasonable 
cost of any study, analysis, report, test, or project; and reasonable 
attorney or agent fees incurred after initiation of the adversary 
adjudication subject to the EAJA application. This paragraph also 
provides that the presiding officer will base awards on prevailing 
market rates for the kind and quality of the services furnished, even 
if the services were provided without charge or at reduced rate to the 
applicant. However, no award for the fee of an attorney or agent under 
this subpart may exceed the hourly rate specified in EAJA (5 U.S.C. 
504(b)(1)(A)) except, as permitted by EAJA, to account for inflation as 
requested by the applicant and documented in the EAJA application or if 
a special factor, such as the limited availability of qualified 
attorneys or agents for the proceedings involved,

[[Page 89835]]

justifies a higher fee.\39\ Pursuant to EAJA, this paragraph also 
prohibits an award for expert witness fees that exceed the highest rate 
paid for expert witnesses by the OCC.\40\
---------------------------------------------------------------------------

    \39\ 5 U.S.C. 504(b)(1)(A).
    \40\ Id.
---------------------------------------------------------------------------

    Section 19.215(d)(2) provides factors the presiding officer should 
consider in determining the reasonableness of the attorney, agent, or 
expert witness fees. These factors are: (1) if in private practice, the 
attorney's, agent's, or witness' customary fee for similar services; 
(2) if an employee of the applicant, the fully allocated cost of the 
attorney's, agent's, or witness' services; (3) the prevailing rate for 
similar services in the community in which the attorney, agent, or 
witness ordinarily perform services; (4) the time actually spent in the 
representation of the applicant; (5) the time reasonably spent in light 
of the difficulty or complexity of the issues in the proceeding; and 
(6) any other factors as may bear on the value of the services 
provided.
    Section 19.215(d)(3) provides parameters for the award of costs for 
any study, analysis, report, test, project, or similar matter. 
Specifically, the presiding officer may award the reasonable cost of 
these services prepared on behalf of the applicant to the extent that 
the charge for the service does not exceed the prevailing rate for 
similar services and the presiding officer finds that the service was 
necessary for preparation of the applicant's case.
    As in Sec.  4.06 of the ACUS Model Rule, Sec.  19.215(d)(4) permits 
a presiding officer to reduce the amount to be awarded or deny an award 
to the extent that the party during the proceedings engaged in conduct 
that unduly and unreasonably protracted final resolution of the matter 
in controversy. Unlike Sec.  4.06 of the ACUS Model Rule, paragraph 
(d)(4) also permits the presiding officer to reduce or deny the award 
if special circumstances make the award sought unjust. This provision 
is included in 5 U.S.C. 504(a)(1) and in the Treasury rule \41\ and is 
noted in the authority and scope section of subpart L, Sec.  19.205(a). 
The OCC believes it is helpful to include it in Sec.  19.215 as this 
section is specifically related to the decision making of the presiding 
officer.
---------------------------------------------------------------------------

    \41\ See 31 CFR 6.14.
---------------------------------------------------------------------------

    Finally, Sec.  19.215(e) provides that the Comptroller will issue a 
final decision on the EAJA application or remand the application to the 
presiding officer for further proceedings in accordance with Sec.  
19.40, Review by the Comptroller. This provision is not included in the 
ACUS Model Rule. However, the OCC believes that for clarity and 
completeness its EAJA rule should specify the final agency action on 
the EAJA application, as delineated in part 19.
Agency Review
    As in Sec.  4.07 of the ACUS Model Rule, Sec.  19.216 allows an 
applicant or Enforcement Counsel to seek review of the presiding 
officer's decision on the EAJA application, in accordance with Sec.  
19.39, Exceptions to recommended decision. However, Sec.  19.216 does 
not include the provision in the ACUS Model Rule that permits the 
agency to review the decision on its own initiative. The OCC does not 
believe that this provision is necessary because the regulation 
includes a separate provision in Sec.  19.215(e), not included in the 
Model rule, that provides for a final decision on the EAJA application 
by the Comptroller or the Comptroller's remand of the application to 
the presiding officer for further proceedings.
Judicial Review
    As provided by 5 U.S.C. 504(c)(2) and in Sec.  4.08 of the ACUS 
Model Rule, Sec.  19.217 provides for judicial review of final OCC 
decisions on awards in accordance with 5 U.S.C. 504(c)(2).
Stay of Decision Concerning Award
    As in Sec.  4.09 of the ACUS Model Rule, Sec.  19.218 provides for 
an automatic stay of an EAJA proceeding until the OCC's final 
disposition of the decision on which the application is based and 
either the time period for judicial review has expired, or if judicial 
review is sought, final disposition is made by a court and no further 
judicial review is available.
Payment of Award
    As in Sec.  4.10 of the ACUS Model Rule, Sec.  19.219 provides that 
an applicant seeking payment of an award must submit to the OCC's 
Litigation Group a copy of the final decision granting the award 
accompanied by a certification that the applicant will not seek review 
of the decision in the United States courts. This section also provides 
that the OCC pay any amount owed to an applicant within 90 days.
Subpart M--Procedures for Reclassifying an Insured Depository 
Institution Based on Criteria Other Than Capital
    Current subpart M of part 19 and 12 CFR 165.8 set out procedures 
for reclassifying a national bank or Federal savings association, 
respectively, to a lower capital category based on criteria other than 
capital, pursuant to section 38 of the FDIA (12 U.S.C. 1831o) and the 
prompt corrective action rule, 12 CFR part 6. These procedures are 
substantively the same, and the final rule amends subpart M to include 
Federal savings associations in addition to national banks and removes 
Sec.  165.8. As this subpart currently also applies to insured Federal 
branches of foreign banks, the final rule specifically includes insured 
Federal branches in the scope section.
    Specifically, the final rule replaces the term ``bank'' each time 
it appears in subpart M with the term ``insured depository 
institution,'' and defines this term to mean an insured national bank, 
an insured Federal savings association, an insured Federal savings 
bank, or an insured Federal branch of a foreign bank. The final rule 
also replaces the incorrect reference to subpart M with a reference to 
part 6 in Sec.  19.220. In addition, the final rule makes a conforming 
change to Sec.  19.221(b)(3) to replace the phrase ``a written appeal 
of the proposed classification'' with ``a written response to the 
proposed reclassification,'' which is the terminology used elsewhere in 
this section. Furthermore, as in Sec. Sec.  19.35, 19.112, and 19.120, 
the final rule adds paragraph (g)(3) to Sec.  19.221 to provide rules 
governing electronic presentations in the course of a hearing. 
Specifically, this provision provides that, based on the circumstances 
of each hearing, the presiding officer may direct the use of, or any 
party may elect to use, an electronic presentation during the hearing. 
If required by the presiding officer, each party will be responsible 
for its own presentation and related costs unless the parties agree 
otherwise. As indicated previously, this new language is necessary to 
account for the routine use of electronic presentations that current 
part 19 does not address. The final rule also makes a conforming change 
in paragraph (g)(2) that allows, by stipulation of the parties or by 
order of the presiding officer, a court reporter or other authorized 
person to administer the required oath to a witness remotely without 
being in the physical presence of the witness. Additionally, the final 
rule revises the heading to subpart M to include insured depository 
institutions and to describe the subject of the subpart more 
accurately. Lastly, the final rule makes technical changes to 12 CFR 
6.3, 6.4, 6.5, and 6.6 to remove the separate references to Sec.  165.8 
with respect to savings associations.

[[Page 89836]]

Subpart N--Order To Dismiss a Director or Senior Executive Officer
    Current subpart N of part 19 and 12 CFR 165.9 set out procedures 
associated with an order to dismiss a director or senior executive 
officer of a national bank or Federal savings association, 
respectively, pursuant to an order issued under section 38 of the FDIA 
(12 U.S.C. 1831o) and, with respect to national banks, the prompt 
corrective action rule, 12 CFR part 6. Subpart N and Sec.  165.9 are 
substantively the same, and the final rule applies subpart N to Federal 
savings associations in addition to national banks and removes Sec.  
165.9. The final rule also replaces the term ``bank'' each time it 
appears in Sec.  19.230 with the term ``insured depository 
institution'' and defines the term based on section 3 of the FDIA (12 
U.S.C. 1813(c)(2)) to mean an insured national bank, an insured Federal 
savings association, an insured Federal savings bank, or an insured 
Federal branch of a foreign bank.
    The final rule also amends Sec.  19.231(b). This paragraph 
currently provides that a director or senior executive officer who has 
been served with a directive for dismissal has 10 calendar days to file 
a written request for reinstatement, unless the OCC allows further time 
as requested of the Respondent. The final rule provides that failure by 
the Respondent to file this request within the specified time period 
will constitute a waiver of the opportunity to respond and consent to 
the dismissal. The OCC is adding this statement to the regulation to 
clarify the result of a failure to request reinstatement. The final 
rule also makes a stylistic revision to Sec.  19.231(b) to remove 
passive sentence structure.
    In addition, the final rule amends Sec.  19.231(c), which currently 
requires that the OCC issue an order directing an informal hearing to 
commence no later than 30 days after receipt of the request for a 
hearing unless the respondent requests a later date. The final rule 
amends this provision to provide that a later hearing date may occur 
only if permitted by the OCC, and, therefore, the request for an 
extension will not be automatically approved. This change allows the 
OCC some discretion as to how far into the future a hearing may take 
place.
    The final rule amends Sec.  19.231(d) to provide rules governing 
electronic presentations in the course of a hearing. Specifically, the 
amendment provides that, based on the circumstances of each hearing, 
the presiding officer may direct the use of, or any party may elect to 
use, an electronic presentation during the hearing. If required by the 
presiding officer, each party will be responsible for its own 
presentation and related costs unless the parties agree otherwise. This 
new language is necessary to account for the routine use of electronic 
presentations that current part 19 does not address. The final rule 
also makes a conforming change in Sec.  19.231(d)(5) to allow, by 
stipulation of the parties or by order of the presiding officer, a 
court reporter or other authorized person to administer the required 
oath to a witness remotely without being in the physical presence of 
the witness. The final rule also makes a clarifying change in paragraph 
(d)(1), Hearing procedures. Among other things, this paragraph 
currently provides that a Respondent has the right to introduce 
relevant written materials and to present oral argument. The final rule 
clarifies that these written materials and oral arguments may be made 
at the hearing. This clarification ensures that the Respondent is aware 
that this right is provided during the hearing and not outside of the 
hearing context. The final rule also moves the sentence regarding oral 
testimony and witnesses in paragraph (d)(1) to paragraph (d)(5) to 
better organize paragraph (d) and adds paragraph headings.
    Furthermore, the final rule revises the heading of subpart N to 
describe the subject of the subpart more accurately.
    Lastly, the final rule makes technical changes to 12 CFR 6.6 to 
remove the separate reference to Sec.  165.9 with respect to Federal 
savings associations. Because Sec. Sec.  165.8 and 165.9 are the only 
sections in current part 165, the final rule removes part 165 in its 
entirety.
Subpart O--Civil Money Penalty Inflation Adjustments
    Current part 19, subpart O, and Sec.  109.103 provide the 
statutorily required formula to calculate inflation adjustments for 
civil money penalties assessed against national banks and Federal 
savings associations, respectively. These sections also indicate that 
the OCC will publish, on or before January 15 of each calendar year, an 
annual notice in the Federal Register of the maximum penalties the OCC 
may assess. The final rule retains subpart O and removes Sec.  109.103. 
No amendments are necessary to apply subpart O to Federal savings 
associations. The final rule amends the section heading to be more 
descriptive and makes a stylistic revision in paragraph (a) to remove 
passive sentence structure.
Subpart Q--Forfeiture of Franchise for Money Laundering or Cash 
Transaction Reporting Offenses
    Twelve U.S.C. 93(d)(1) provides that the Comptroller will, after 
receiving notification from the U.S. Attorney General of a conviction 
of a criminal offense under section 1956 or 1957 of title 18 (18 U.S.C. 
1956, 1957) or may, after receiving notification for the U.S. Attorney 
General of a conviction of a criminal offense under section 5322 or 
5324 of title 31 (31 U.S.C. 5322, 5324), issue to the convicted 
national bank or Federal branch or agency of foreign bank a notice of 
the Comptroller's intent to terminate all rights, privileges and 
franchises of the bank or Federal branch or agency and to schedule a 
pretermination hearing. The offenses include financial crimes, 
including money laundering (18 U.S.C. 1956), engaging in monetary 
transactions in criminally derived property (18 U.S.C. 1957), and 
structuring transactions to evade reporting requirements (31 U.S.C. 
5324). Twelve U.S.C. 1464(w) imposes the same requirement with respect 
to convicted Federal savings associations.
    Part 19 currently does not include specific procedures for a 
charter pretermination hearing. The final rule adds a new subpart Q 
that sets forth Administrative Procedure Act (APA) compliant procedures 
for pretermination hearings, which will be conducted before a presiding 
officer appointed by the Comptroller. These procedures are largely 
analogous to the deposit insurance termination hearing procedures 
instituted by the FDIC and NCUA for insured State depository 
institutions and federally insured credit unions, respectively, that 
are convicted of the same offenses.
    Specifically, Sec.  19.250 makes subpart A applicable, except as 
provided in new subpart Q, to proceedings by the Comptroller to 
determine whether, pursuant to 12 U.S.C. 93(d) or 12 U.S.C. 1464(w), as 
applicable, to terminate all rights, privileges, and franchises of a 
national bank, Federal savings association, or Federal branch or agency 
convicted of a criminal offense under 18 U.S.C. 1956 or 1957 or 31 
U.S.C. 5322 or 5324.
    Section 19.251(a) provides that, after receiving written 
notification from the U.S. Attorney General of a conviction of a 
criminal offense under sections 18 U.S.C. 1956 or 1957 or 31 U.S.C. 
5322 or 5324, the Comptroller will issue a written notice of intent to 
terminate all rights, privileges and franchises to the convicted 
national bank, Federal savings association, or Federal branch or agency 
and schedule a pretermination

[[Page 89837]]

hearing. Section 19.251(b) details the requisite contents of the notice 
and Sec.  19.251(c) provides that failure to answer the notice will be 
deemed consent to the termination and that the Comptroller may order 
the termination. This notice of intent to terminate is similar to the 
notice in Sec.  19.18 except that the subpart Q notice of intent lists 
the basis of termination pursuant to factors listed in Sec.  19.253 
instead of the statement of matters of fact or law; the time within 
which to file an answer in response to the notice of intent will be 
established by the presiding officer instead of by law or regulation; 
and the answer must be filed with the OCC instead of with OFIA. Section 
19.251(d) provides that the OCC will serve the notice upon the national 
bank, Federal savings association, or Federal branch or agency in the 
manner set forth in Sec.  19.11(c).
    Section 19.252 provides that the Comptroller will designate a 
presiding officer to conduct the pretermination hearing. The presiding 
officer has the same powers set forth in Sec.  19.5, including the 
discretion necessary to conduct the pretermination hearing in a manner 
that avoids unnecessary delay. Section 19.252 also provides that the 
presiding officer may limit the use of discovery and limit 
opportunities to file written memoranda, briefs, affidavits, or other 
materials or documents to avoid relitigating facts already stipulated 
to by the parties, conceded to by the institution, or otherwise already 
firmly established by the underlying criminal conviction.
    Section 19.253 provides the factors the Comptroller will take into 
account when determining whether or not to terminate a franchise as set 
forth in 12 U.S.C. 93(d) and 1464(w). The factors are: (1) the extent 
to which directors or senior executive officials knew of or were 
involved in the criminal offense, (2) the extent to which the offense 
occurred despite the existence of policies and procedures within the 
institution designed to prevent the occurrence of the offense, (3) the 
extent to which the institution fully cooperated with law enforcement 
authorities regarding the investigation of the offense, (4) the extent 
to which the institution has implemented additional internal controls 
since the commission of the offense to prevent a reoccurrence, and (5) 
the extent to which the interest of the local community in having 
adequate deposit and credit services available would be threatened by 
the forfeiture of the franchise.
    Lastly, Sec.  19.254 delineates the right of judicial review under 
12 U.S.C. 1818(h) of a termination order as required by 12 U.S.C. 
93(d)(1)(C) and 1464(w)(1)(C).
Technical Changes
    In addition to the technical changes discussed elsewhere in this 
SUPPLEMENTARY INFORMATION, the final rule makes technical changes 
throughout parts B through P by: (1) replacing the word ``shall'' with 
``must,'' ``will,'' or other appropriate language, which is the more 
current rule writing convention for imposing an obligation and is the 
recommended drafting style of the Federal Register; (2) conforming 
citation styles and providing more detailed references to the cited 
statutes; (3) conforming abbreviations, including replacing the use of 
the term ``administrative law judge'' with ``ALJ; (4) replacing gender 
references such as ``him,'' ``his'' or ``her'' with gender-neutral 
terminology; and (5) making other non-substantive grammatical, 
clarifying, organizational, and stylistic changes. The final rule also 
makes a technical change to 12 CFR 3.405, which references cease and 
desist proceedings with respect to minimum capital ratios, to remove 
the reference to part 109 for savings associations and replace it with 
part 19 because this final rule removes part 109 and applies part 19 to 
Federal savings associations. Similarly, this final rule makes a new 
technical change to Sec.  150.570, which sets forth the rules governing 
the conduct of a hearing required under 12 U.S.C. 1464(n)(10)(B) for 
revocation of fiduciary powers, to replace the reference to part 109 
with a reference to part 19.

B. Amendments to the Board's Local Rules--Final Rules

    The Board is adopting a final rule to amend subpart B of part 263--
the Board Local Rules Supplementing the Uniform Rules--and to create a 
new subpart K (Sec. Sec.  263.450 through 263.457) establishing new 
rules governing all Board formal investigations. The new subpart K 
replaces subpart L of Regulation LL (12 CFR part 238), which is 
eliminated. The Board did not receive any comments on its proposed 
changes to the Local Rules and is adopting the proposed amendments.
    The revised Local Rules in subpart B apply only to adjudicatory 
proceedings initiated on or after the effective date of this final 
rule, April 1, 2024. The previous version of the Local Rules in subpart 
B, which are included in appendix A to part 263 of this final rule, are 
applicable to all adjudicatory proceedings initiated before, April 1, 
2024.
    The Board revised its Local Rules to conform them to the changes in 
the Uniform Rules and to facilitate the use of electronic 
communications and technology in Board proceedings. In addition, to 
promote transparency and fairness, the Board added the new subpart K 
establishing rules governing all Board formal investigations and a new 
section in subpart B (Sec.  263.57) establishing rules for the 
imposition of sanctions in administrative proceedings. Because these 
new sections are modeled on the rules already adopted by other banking 
regulators, they promote uniformity in the rules of banking regulators. 
Subparts C through J of part 263 have not been amended and remain in 
effect.
Subpart B--Board Local Rules Supplementing the Uniform Rules
Section 263.52 Address for Filing
    Section 263.52 provides an electronic mail address for papers to be 
filed electronically with the Secretary of the Board.
Section 263.53 Discovery Depositions
    Section 263.53 requires parties to state in the application for a 
discovery deposition the manner (e.g., remote means, in person) of the 
deposition, to note that the ALJ can consider the manner of the 
deposition in determining whether to grant or modify it, and to clarify 
that depositions can be conducted by remote means and witnesses can be 
sworn remotely.
Section 263.55 Board as Presiding Officer
    Section 263.55 clarifies that when the Board designates itself, one 
of its members, or an authorized officer, to serve as presiding officer 
in a formal hearing, the authority of the Board or its designee will 
include all the authority provided to an ALJ under the rules governing 
formal hearings.
Section 263.57 Sanctions Related to Conduct in Adjudicatory Proceedings
    Section 263.57 is a new section that establishes the rules 
governing the imposition of sanctions against parties or persons 
participating in administrative adjudicatory proceedings. The new 
section: (a) explicitly authorizes the ALJ to impose sanctions against 
parties or persons; (b) describes the sanctions the ALJ may impose; (c) 
describes procedures for imposing sanctions; and (d) establishes that 
the ALJ or the Board may impose other sanctions authorized by 
applicable statute or regulation.

[[Page 89838]]

Subpart K--Formal Investigative Proceedings
    Subpart K is a new subpart that establishes a single set of rules 
governing formal investigations for all Board-regulated organizations 
and any other entity or individual that the Board has authority to 
investigate or bring an enforcement action against. Subpart K, which is 
modeled on the investigative procedures of other Federal financial 
industry enforcement agencies, defines a formal investigative 
proceeding by the Board and its scope; delineates some of the powers of 
the Board's designated representatives conducting formal investigative 
proceedings; requires the confidentiality of formal investigative 
proceedings; provides for certain rights of witnesses in formal 
investigative proceedings; and establishes investigative subpoena 
procedures. Subpart K governs only the conduct of formal 
investigations; administrative adjudicatory proceedings continue to be 
governed by the Board's Uniform Rules and Local Rules (12 CFR part 263, 
subparts A and B).

C. Amendments to the FDIC's Local Rules--Final Rules

    The FDIC is adopting a final rule to amend its Local Rules set 
forth at 12 CFR part 308, subpart B, General Rules of Procedure, which 
supplement the Uniform Rules set forth in 12 CFR part 308, subpart A. 
The FDIC did not receive any comments to the Local Rules and for the 
reasons stated herein and in the proposed rule, the FDIC is adopting 
the amendments as proposed.
    The FDIC included a new Sec.  308.100 as a technical change to 
clarify the applicability date of the revised Local Rules set forth in 
subpart B of this part. The newly revised rules only apply to 
adjudicatory proceedings initiated on or after the effective date of 
this final rule, April 1, 2024. Any adjudicatory proceedings initiated 
before April 1, 2024, continue to be governed by the previous version 
of the Local Rules included in appendix A in part 308 of this final 
rule.
    The FDIC revised its Local Rules to reflect the current processes 
and procedures routinely ordered by the administrative law judges 
(ALJs) that mirror procedures followed in the Federal court system. The 
FDIC also added new provisions regarding modern discovery practices, 
depositions, and disclosure of expert witness testimony to promote 
cooperation, fairness, and transparency. Similar to the changes in the 
Uniform Rules, the FDIC updated the language throughout its Local Rules 
to reflect the modernized language used in rulemaking.
Section 308.100 Applicability Date
    Section 308.100 was a technical change created to explain the 
applicability date of its revised Local Rules.
Section 308.102 Authority of Board of Directors and Administrative 
Officer
    Section 308.102 was updated to reflect the current internal 
organization of the FDIC.
Section 308.103 Assignment to Administrative Law Judge (ALJ)
    Section 308.103 was renamed to better reflect additional changes to 
how matters are assigned to an ALJ.
Section 308.104 Filings With the Board of Directors
    Section 308.104 provides an electronic mail address for the FDIC's 
Administrative Officer, who is the official custodian of the record for 
administrative proceedings, and with whom all parties must file an 
electronic copy of all pleadings.
Section 308.107 Supplemental Discovery Rules
    Section 308.107 was renamed to reflect the updates to the FDIC's 
discovery processes to include modern discovery practices and 
procedural orders issued by the ALJs and to allow for limited 
depositions.
Section 308.107(a) Scope of Discovery
    Section 308.107(a) describes the permitted scope of discovery. The 
FDIC adopted the concept of ``proportionality'' in discovery production 
and set forth limits on electronically-stored information (ESI).
Section 308.107(b) Joint Discovery Plan
    Section 308.107(b) adds a Joint Discovery Plan to the discovery 
process.
Section 308.107(c) Document and Electronically Stored Information (ESI) 
Discovery
    Section 308.107(c) integrates the Local Rules with the Uniform 
Rules.
Section 308.107(d) Expert Witness Disclosures
    Section 308.107(d) describes the required disclosures for expert 
witness testimony. Section 308.107(d)(2)(i) applies to professional 
experts who generally do not work for a party but are specifically 
engaged for the purpose of providing expert testimony. Section 
308.107(d)(2)(ii) applies to those individuals whose expertise comes 
from the person's regular course of business such as, a commissioned 
bank examiner or bank personnel, who will be offered as an expert 
witness at the hearing.
Section 308.107(e) Depositions
    Section 308.107(e) allows parties to pursue limited discovery 
depositions of individuals with direct knowledge of facts relevant to 
the proceeding and individuals designated as expert witnesses. Section 
308.107(e)(1) authorizes deposition discovery only to the extent that 
it is proportional to the needs of the case and the information sought 
from the depositions cannot be obtained from another source that is 
more convenient, less burdensome, or less expensive. In the absence of 
extraordinary circumstances, depositions are limited to individuals 
expected to testify at the hearing.
Section 308.107(f) Discovery Motions
    Section 308.107(f) clarifies certain matters related to discovery 
motions. Section 308.107(f)(1) clarifies that the ALJ must limit 
inappropriate discovery either on motion, or on their own initiative. 
Section 308.107(f)(2) provides that parties may move to terminate 
depositions that are being conducted in bad faith or an inappropriate 
manner. Section 308.107(f)(3) clarifies that the provisions of Sec.  
308.25(f), governing motions to compel document discovery, apply 
equally to all motions to compel discovery.

V. Discussion of OCC Changes to Part 4, Service of Process

    The final rule amends subpart A of 12 CFR part 4, Organization and 
Functions, to add a new Sec.  4.8 that addresses service of process. 
This new provision puts private parties on notice of the established 
process they should use in serving the OCC, Comptroller, or officers or 
employees of the OCC in a private action. The OCC is codifying this 
process in the final rule to help avoid possible confusion as to where 
and how private parties serve the OCC, Comptroller, or officers or 
employees of the OCC and to ensure that the OCC has adequate notice to 
respond to a complaint or other filing. The final rule provides that 
``officers'' are officials who are not employees of the OCC, such as an 
ALJ.
    Specifically, Sec.  4.8(a) provides that Sec.  4.8(b), (c), and (d) 
apply to service of process upon the OCC, the Comptroller acting in 
their official capacity, officers or employees of the OCC who are sued 
in their official capacity, and officers or employees of the OCC who 
are sued in an individual capacity for an act or omission occurring in 
connection with

[[Page 89839]]

duties performed on the behalf of the OCC. Section 4.8(b) provides that 
service of process for actions in Federal courts should be made upon 
the OCC, the Comptroller, or officers or employees of the OCC by 
serving the United States under the procedures set forth in the Federal 
Rules of Civil Procedure governing the service of process upon the 
United States and its agencies, corporations, officers, or 
employees.\42\ Section 4.8(c) provides that service of process for 
actions brought in State courts should be made upon the OCC, the 
Comptroller, or officers or employees of the OCC by sending copies of 
the summons and complaint by registered or certified mail to the Chief 
Counsel, Office of the Comptroller of the Currency, Washington, DC 
20219. Section 4.8(c) also encourages parties to provide copies of the 
summons and complaint to the appropriate United States Attorney in 
accordance with the procedures set forth in the Federal Rules of Civil 
Procedure governing the service of process upon the United States and 
its agencies, corporations, officers, or employees.\43\ Section 4.8(d) 
provides that only the Washington, DC headquarters office of the OCC is 
authorized to accept service of a summons or complaint and that the 
OCC, the Comptroller, or officers or employees of the OCC should be 
served with a copy of the summons or complaint at the Washington, DC 
headquarters office in accordance with Sec.  4.8(b) or (c). This 
provision clarifies that a summons or complaint should not be sent to 
another office of the OCC.
---------------------------------------------------------------------------

    \42\ See Rule 4(i) of the Federal Rules of Civil Procedure.
    \43\ Id.
---------------------------------------------------------------------------

    Finally, Sec.  4.8(e) provides that the OCC is not an agent for 
service of process upon a national bank, Federal savings association, 
or Federal branch or agency of a foreign bank. Instead, it directs 
parties to serve a summons or complaint upon the institution in 
accordance with the laws and procedures for the court in which the 
action has been filed. The OCC intends this provision to prevent 
further instances of parties attempting to serve a national bank 
through the OCC.
    As indicated above, the OCC did not receive any comments on the 
proposed amendments to part 4 and is adopting them as proposed with one 
technical correction. The proposed rule set forth the incorrect 
authority section for part 4. The final rule includes the correct 
authority section, which is unchanged from the current rule.

VI. Regulatory Analysis

A. Regulatory Flexibility Act

    OCC: The Regulatory Flexibility Act (RFA) \44\ requires an agency, 
in connection with a rule, to prepare a Final Regulatory Flexibility 
Analysis (FRFA) describing the impact of the rule on small entities 
(defined by the Small Business Administration (SBA) for purposes of the 
RFA to include commercial banks and savings institutions with total 
assets of $850 million or less and trust companies with total assets of 
$47 million or less) \45\ or to certify that the final rule would not 
have a significant economic impact on a substantial number of small 
entities.
---------------------------------------------------------------------------

    \44\ 5 U.S.C. 601 et seq.
    \45\ See the SBA's size thresholds for commercial banks and 
savings institutions, and trust companies, 13 CFR 121.201.
---------------------------------------------------------------------------

    The OCC currently supervises approximately 1,070 institutions 
(commercial banks, trust companies, Federal savings associations, and 
branches or agencies of foreign banks, collectively banks), of which 
661 are small entities.\46\ The final rule could impact any OCC-
supervised institution, including any of these small entities. However, 
it is unlikely that the rule would impact more than a de minimis number 
of OCC-supervised institutions in any given year.\47\ Furthermore, the 
rule would facilitate the orderly determination of administrative 
proceedings and its proposed changes are primarily updates and 
clarifications of administrative procedure and in general reflect 
current practices. Therefore, the OCC concludes that the final rule 
would not impose more than minimal costs on institutions that may be 
impacted. Because the OCC estimates that expenditures, if any, 
associated with the final rule would be de minimis, the OCC certifies 
that the final rule does not have a significant economic impact on a 
substantial number of small entities supervised by the OCC. 
Accordingly, an FRFA is not required.
---------------------------------------------------------------------------

    \46\ Consistent with the General Principles of Affiliation 13 
CFR 121.103(a), the OCC counts the assets of affiliated financial 
institutions when determining if it should classify an institution 
as a small entity. The OCC used December 31, 2022, to determine size 
because a ``financial institution's assets are determined by 
averaging the assets reported on its four quarterly financial 
statements for the preceding year.'' See footnote 8 of the SBA's 
Table of Size Standards.
    \47\ Based on activity during the past five years, approximately 
23 banks (an average of less than 5 per year) would be impacted by 
the proposed changes to part 19, subparts A, B, C, I, L, and M. 
Furthermore, during the past five years the OCC has not received any 
Equal Access to Justice Act (EAJA) applications from a bank for the 
payment of attorney's fees.
---------------------------------------------------------------------------

    Board: In accordance with the Regulatory Flexibility Act (RFA),\48\ 
the Board published an initial regulatory flexibility analysis in the 
notice of proposed rulemaking. The Board did not receive any comments 
on its initial regulatory flexibility analysis. The RFA also requires 
an agency to prepare a final regulatory flexibility analysis generally 
describing the impact of the rule on small entities, unless the agency 
certifies that the rule will not, if promulgated, have a significant 
economic impact on a substantial number of small entities.\49\ Under 
regulations issued by the Small Business Administration, a small entity 
includes a bank, bank holding company, or savings and loan holding 
company with assets of $850 million or less and trust companies with 
annual receipts of $47 million or less.\50\
---------------------------------------------------------------------------

    \48\ 5 U.S.C. 601 et seq.
    \49\ 5 U.S.C. 604; 605(b).
    \50\ 13 CFR 121.201.
---------------------------------------------------------------------------

    Consistent with the analysis included in the initial regulatory 
flexibility analysis, the Board certifies that the final rule will not 
have a significant economic impact on a substantial number of small 
entities. As explained above, the Agencies are amending the Uniform 
Rules and their local rules to recognize the use of electronic 
communications in all aspects of administrative hearings and to 
otherwise increase the efficiency and fairness of administrative 
adjudications. In addition, the Board is establishing a single set of 
rules governing all formal investigations. These rules only establish 
procedures governing Board formal investigations and adjudicatory 
proceedings. The rules do not impose any requirement on regulated 
entities, and regulated entities would not need to take any action in 
response to the proposed rules. The rules will only apply to regulated 
entities if they become parties to administrative adjudications or are 
subject to formal investigations, which is unusual. Therefore, the 
rules will not have a significant economic impact on a substantial 
number of small entities.
    FDIC: The RFA requires that, in connection with a final rule, an 
agency prepare and make available for public comment a final regulatory 
flexibility analysis that describes the impact of the final rule on 
small entities.\51\ However, a regulatory flexibility analysis is not 
required if the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities, 
and publishes its certification and a short explanatory

[[Page 89840]]

statement in the Federal Register together with the rule. The SBA has 
defined ``small entities'' to include banking organizations with total 
assets of less than or equal to $850 million.\52\ Generally, the FDIC 
considers a significant effect to be a quantified effect in excess of 5 
percent of total annual salaries and benefits per institution, or 2.5 
percent of total noninterest expenses. The FDIC believes that effects 
in excess of one or more of these thresholds typically represent 
significant effects for FDIC-supervised institutions.
---------------------------------------------------------------------------

    \51\ 5 U.S.C. 601 et seq.
    \52\ The SBA defines a small banking organization as having $850 
million or less in assets, where ``a financial institution's assets 
are determined by averaging the assets reported on its four 
quarterly financial statements for the preceding year.'' See 13 CFR 
121.201 (as amended by 87 FR 69118, effective December 19, 2022). 
``SBA counts the receipts, employees, or other measure of size of 
the concern whose size is at issue and all of its domestic and 
foreign affiliates.'' See 13 CFR 121.103. Following these 
regulations, the FDIC uses a covered entity's affiliated and 
acquired assets, averaged over the preceding four quarters, to 
determine whether the FDIC-supervised institution is ``small'' for 
the purposes of RFA.
---------------------------------------------------------------------------

    As of the quarter ending December 30, 2022, the FDIC supervised 
3,038 depository institutions,\53\ of which 2,325 were considered small 
for the purposes of the RFA.\54\
---------------------------------------------------------------------------

    \53\ FDIC-supervised institutions are set forth in 12 U.S.C. 
1813(q)(2).
    \54\ FDIC Call Report data, December 31, 2022.
---------------------------------------------------------------------------

    As previously discussed, the Agencies are amending the Uniform 
Rules to recognize the use of electronic communications in all aspects 
of administrative hearings and to otherwise increase the efficiency and 
fairness of administrative adjudications. The FDIC is also modifying 
the Local Rules of administrative practice and procedure. The 
amendments apply to administrative proceedings held by the FDIC and 
impose no significant additional burdens on small entities. Further, 
the FDIC typically brings less than five formal administrative 
proceedings annually. Therefore, the FDIC concludes that the final rule 
will not have a significant impact on a substantial number of small 
entities. For the reasons described above and pursuant to 5 U.S.C. 
605(b), the FDIC certifies that the final rule will not have a 
significant economic impact on a substantial number of small entities.
    NCUA: The RFA generally requires that, in connection with a 
rulemaking, an agency prepare and make available for public comment 
regulatory flexibility analysis that describes the impact of a proposed 
rule on small entities. A regulatory flexibility analysis is not 
required, however, if the agency certifies that the rule will not have 
a significant economic impact on a substantial number of small entities 
(defined for purposes of the RFA to include federally insured credit 
unions with assets less than $100 million) and publishes its 
certification and a short, explanatory statement in the Federal 
Register together with the rule. The final rule amends the Uniform 
Rules to recognize the use of electronic communications in all aspects 
of administrative hearings and to otherwise increase the efficiency and 
fairness of administrative adjudications. The changes consist of 
updates and clarifications of administrative procedure and impose no 
significant new burdens on credit unions, parties to administrative 
actions, or counsel. Also, only a small number of federally insured 
credit unions and institution-affiliated parties are subject to actions 
that the final rule will govern, as the NCUA currently has only one 
pending proceeding and generally files a small number of cases. 
Accordingly, the NCUA certifies that the final rule will not have a 
significant economic impact on a substantial number of small credit 
unions.

B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 \55\ (PRA) states that no 
agency may conduct or sponsor, nor is the respondent required to 
respond to, an information collection unless it displays a currently 
valid Office of Management and Budget (OMB) control number. The 
Agencies have reviewed this final rule and determined that it does not 
create any information collection or revise any existing collection of 
information. Accordingly, no PRA submissions will be made to the OMB 
with respect to this final rule. The Board reviewed the rule under the 
authority delegated to the Board by the OMB.
---------------------------------------------------------------------------

    \55\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------

C. OCC Unfunded Mandates Reform Act of 1995

    The OCC analyzed the rule under the factors set forth in the 
Unfunded Mandates Reform Act of 1995 (UMRA).\56\ Under this analysis, 
the OCC considered whether the final rule includes a Federal mandate 
that may result in the expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year ($182 million as adjusted for 
inflation). The UMRA does not apply to regulations that incorporate 
requirements specifically set forth in law.
---------------------------------------------------------------------------

    \56\ 2 U.S.C. 1532.
---------------------------------------------------------------------------

    As discussed above, the OCC estimates that expenditures, if any, 
associated with the final rule would be de minimis. Therefore, the OCC 
concludes that the proposed rule would not result in an expenditure of 
$182 million or more annually by State, local, and Tribal governments, 
or by the private sector. Because the final rule does not trigger the 
UMRA cost threshold, the OCC has not prepared the written statement 
described in section 202 of the UMRA.

D. Riegle Community Development and Regulatory Improvement Act

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\57\ in determining the effective 
date and administrative compliance requirements for new regulations 
that impose additional reporting, disclosure, or other requirements on 
insured depository institutions (IDIs), the OCC, Board, and FDIC \58\ 
must consider, consistent with principles of safety and soundness and 
the public interest: (1) any administrative burdens that such 
regulations would place on depository institutions, including small 
depository institutions, and customers of depository institutions; and 
(2) the benefits of such regulations. In addition, section 302(b) of 
RCDRIA requires new regulations and amendments to regulations that 
impose additional reporting, disclosures, or other new requirements on 
IDIs generally to take effect on the first day of a calendar quarter 
that begins on or after the date on which the regulations are published 
in final form.\59\
---------------------------------------------------------------------------

    \57\ 12 U.S.C. 4802(a).
    \58\ RCDRIA does not apply to the NCUA.
    \59\ 12 U.S.C. 4802.
---------------------------------------------------------------------------

    With respect to administrative compliance requirements, the OCC, 
Board, and FDIC have considered the administrative burdens and the 
benefits of this final rule and believes that any burdens are necessary 
for proper OCC, Board, and FDIC supervision and also to update and 
conform the OCC's, Board's and FDIC's rules to current practices. As 
examples, the final rule allows for electronic filing of documents and 
expands the definition of the term ``document'' in discovery to account 
for the range of digital information now available. The final rule's 
benefits include clarifying existing requirements, codifying existing 
practice, removing unnecessary provisions, and updating and modernizing 
certain provisions. Further discussion of the consideration

[[Page 89841]]

by the OCC, Board, and FDIC of these administrative compliance 
requirements is found in other sections of the final rule's 
SUPPLEMENTARY INFORMATION section.
    Because this final rule is published on December 28, 2023, the 
April 1, 2024, effective date complies with the RCDRIA requirement that 
a rule take effect on the first day of a calendar quarter that begins 
on or after the date on which the regulations are published in final 
form.

E. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \60\ requires the OCC, 
Board, and FDIC \61\ to use plain language in all proposed and final 
rules published after January 1, 2000. The Agencies have sought to 
present the final rule in a simple and straightforward manner. The 
Agencies received no comments on the use of plain language in the 
proposed rule.
---------------------------------------------------------------------------

    \60\ Public Law 106-102, section 722, 113 Stat. 1338, 1471 
(1999), 12 U.S.C. 4809.
    \61\ This requirement does not apply to the NCUA.
---------------------------------------------------------------------------

F. NCUA Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on State and local interests. In 
adherence to fundamental federalism principles, the NCUA, an 
independent regulatory agency as defined in 44 U.S.C. 3502(5), 
voluntarily complies with the principles of the Executive Order. This 
rulemaking will not have a substantial direct effect on the states, on 
the connection between the National Government and the states, or on 
the distribution of power and responsibilities among the various levels 
of government. The final rule amends the Uniform Rules to recognize the 
use of electronic communications in all aspects of administrative 
hearings and to otherwise increase the efficiency and fairness of 
administrative adjudications. The NCUA does not believe these changes 
will affect or alter the NCUA's relationship with State agencies or 
bodies that supervise federally insured, State-chartered credit unions 
or the division of supervisory responsibilities between the NCUA and 
these agencies or bodies. For example, the final rule does not affect 
the NCUA's requirement to provide notice to the commission, board, or 
authority having supervision of a State-chartered credit union of the 
NCUA's intent to institute certain enforcement actions and the grounds 
for them.\62\ The NCUA has determined that this final rule does not 
constitute a policy that has federalism implications for purposes of 
the Executive Order.
---------------------------------------------------------------------------

    \62\ See, e.g., 12 U.S.C. 1786(o).
---------------------------------------------------------------------------

G. NCUA Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this final rule will not affect family 
well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999.\63\ As discussed in the 
preceding regulatory procedure paragraphs, the final rule makes changes 
to procedural rules that apply to federally insured credit unions and 
institution-affiliated parties. These rules have no direct connection 
to families and their well-being, and the NCUA historically has brought 
only a small number of cases under these rules.
---------------------------------------------------------------------------

    \63\ Public Law 105-277, 112 Stat. 2681 (1998).
---------------------------------------------------------------------------

H. The Congressional Review Act

    For purposes of the Congressional Review Act,\64\ the Office of 
Management and Budget (OMB) makes a determination as to whether a final 
rule constitutes a ``major'' rule. If a rule is deemed a ``major rule'' 
by the OMB, the Congressional Review Act generally provides that the 
rule may not take effect until at least 60 days following its 
publication.\65\ The Congressional Review Act defines a ``major rule'' 
as any rule that the Administrator of the Office of Information and 
Regulatory Affairs of the OMB finds has resulted in or is likely to 
result in (1) an annual effect on the economy of $100,000,000 or more; 
(2) a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies or geographic 
regions; or (3) a significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
United States-based enterprises to compete with foreign based 
enterprises in domestic and export markets.\66\ OMB has determined that 
this final rule is not a major rule under the Congressional Review Act. 
As required by the Congressional Review Act, the Agencies will submit 
the final rule and other appropriate reports to Congress and the 
Government Accountability Office for review.
---------------------------------------------------------------------------

    \64\ 5 U.S.C. 801 et seq.
    \65\ 5 U.S.C. 801(a)(3).
    \66\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------

I. Effective Date

    The Administrative Procedure Act \67\ requires that a substantive 
rule must be published not less than 30 days before its effective date, 
except for: (1) substantive rules which grant or recognize an exemption 
or relieve a restriction; (2) interpretative rules and statements of 
policy; or (3) as otherwise provided by the agency for good cause.\68\ 
As stated above, section 302(b) of RCDRIA requires that regulations or 
amendments issued by the OCC, Board, and FDIC that impose additional 
reporting, disclosure, or other requirements on IDIs generally take 
effect on the first day of a calendar quarter that begins on or after 
the date of publication of the final rule, unless, among other things, 
the agency determines for good cause that the regulations should become 
effective before such time.\69\ The final rule is effective April 1, 
2024, which is more than 30 days after its publication date of December 
28, 2023 and on the first date of a calendar quarter following 
publication.
---------------------------------------------------------------------------

    \67\ Codified at 5 U.S.C. 551 et seq.
    \68\ 5 U.S.C. 553(d).
    \69\ 12 U.S.C. 4802(b).
---------------------------------------------------------------------------

List of Subjects

12 CFR Part 3

    Administrative practice and procedure, Banks, Banking, Federal 
Reserve System, Investments, National banks, Reporting and 
recordkeeping requirements, Savings associations.

12 CFR Part 4

    Administrative practice and procedure, Freedom of information, 
Individuals with disabilities, Minority businesses, Organization and 
functions (Government agencies), Reporting and recordkeeping 
requirements, Service of process, Women.

12 CFR Part 6

    Federal Reserve System, Federal savings associations, National 
banks, Penalties.

12 CFR Part 19

    Administrative practice and procedure, Crime, Equal access to 
justice, Federal savings associations, Investigations, National banks, 
Penalties, Securities.

12 CFR Part 108

    Administrative practice and procedure, Crime, Savings associations.

12 CFR Part 109

    Administrative practice and procedure, Penalties.

12 CFR Part 112

    Administrative practice and procedure.

12 CFR Part 150

    Administrative practice and procedure, Reporting and recordkeeping

[[Page 89842]]

requirements, Savings associations, Trusts and trustees.

12 CFR Part 165

    Administrative practice and procedure, Savings associations.

12 CFR Part 238

    Administrative practice and procedure, Banks, Banking, Federal 
Reserve System, Holding companies, Investigations, Reporting and 
recordkeeping requirements, Savings and loan holding companies, 
Securities.

12 CFR Part 263

    Administrative practice and procedure, Federal Reserve System, 
Investigations.

12 CFR Part 308

    Administrative practice and procedure, Bank deposit insurance, 
Banks, Banking, Claims, Crime, Equal access to justice, Fraud, 
Investigations, Lawyers, Penalties, Savings associations.

12 CFR Part 747

    Administrative practice and procedure, Claims, Credit unions, 
Crime, Equal access to justice, Investigations, Lawyers, Penalties, 
Share insurance.

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

    For the reasons set out in the preamble, and under the authority of 
12 U.S.C. 93a, the OCC amends 12 CFR chapter I as follows:

PART 3--CAPITAL ADEQUACY STANDARDS

0
1. The authority citation for part 3 continues to read as follows:

    Authority: 12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 
1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and 
Pub. L. 116-136, 134 Stat. 281.


Sec.  3.405  [Amended]

0
2. Section 3.405 is amended by removing the phrase ``(12 CFR 19.0 
through 19.21 for national banks and 12 CFR part 109 for Federal 
savings associations)'' and adding in its place the phrase ``(12 CFR 
part 19)''.

PART 4--ORGANIZATION AND FUNCTIONS, AVAILABILITY AND RELEASE OF 
INFORMATION, CONTRACTING OUTREACH PROGRAM, POST-EMPLOYMENT 
RESTRICTIONS FOR SENIOR EXAMINERS

0
3. The authority citation for part 4 continues to read as follows:

    Authority:  5 U.S.C. 301, 552; 12 U.S.C. 1, 93a, 161, 481, 482, 
484(a), 1442, 1462a, 1463, 1464, 1817(a), 1818, 1820, 1821, 1831m, 
1831p-1, 1831o, 1833e, 1867, 1951 et seq., 2601 et seq., 2801 et 
seq., 2901 et seq., 3101 et seq., 3401 et seq., 5321, 5412, 5414; 15 
U.S.C. 77uu(b), 78q(c)(3); 18 U.S.C. 641, 1905, 1906; 29 U.S.C. 
1204; 31 U.S.C. 5318(g)(2), 9701; 42 U.S.C. 3601; 44 U.S.C. 3506, 
3510; E.O. 12600 (3 CFR, 1987 Comp., p. 235).


0
4. Add Sec.  4.8 to subpart A to read as follows:


Sec.  4.8  Service of process upon the OCC or the Comptroller.

    (a) Scope. Paragraphs (b) through (d) of this section apply to 
service of process upon the OCC, the Comptroller acting in their 
official capacity, officers (officials who are not employees of the 
OCC, such as an administrative law judge (ALJ) or employees of the OCC 
who are sued in their official capacity), and officers or employees of 
the OCC who are sued in an individual capacity for an act or omission 
occurring in connection with duties performed on the behalf of the OCC.
    (b) Actions in Federal courts. Service of process for actions in 
Federal courts should be made upon the OCC, the Comptroller, or 
officers or employees of the OCC under the procedures set forth in the 
Federal Rules of Civil Procedure governing the service of process upon 
the United States and its agencies, corporations, officers, or 
employees.
    (c) Actions in State courts. Service of process for actions in 
State courts should be made upon the OCC, the Comptroller, or officers 
or employees of the OCC by sending copies of the summons and complaint 
by registered or certified mail, same day courier service, or overnight 
delivery service to the Chief Counsel, Office of the Comptroller of the 
Currency, Washington, DC 20219. In these actions, parties also are 
encouraged to provide copies of the summons and complaint to the 
appropriate United States Attorney in accordance with the procedures 
set forth in Rule 4(i) of the Federal Rules of Civil Procedure.
    (d) Receipt of summons or complaint. Only the Washington, DC 
headquarters office of the OCC is authorized to accept service of a 
summons or complaint. The OCC, the Comptroller, and officers or 
employees of the OCC must be served with a copy of the summons or 
complaint at the Washington, DC headquarters office in accordance with 
paragraphs (b) or (c) of this section.
    (e) Service of process upon a national bank, Federal savings 
association, or Federal branch or agency of a foreign bank. The OCC is 
not an agent for service of process upon a national bank, Federal 
savings association, or Federal branch or agency of a foreign bank. 
Parties seeking to serve a national bank, Federal savings association, 
or Federal branch or agency of a foreign bank must serve the summons or 
complaint upon the institution in accordance with the laws and 
procedures for the court in which the action has been filed.

PART 6--PROMPT CORRECTIVE ACTION

0
5. The authority citation for part 6 continues to read as follows:

    Authority: 12 U.S.C. 93a, 1831o, 5412(b)(2)(B).


Sec.  6.3  [Amended]

0
6. In Sec.  6.3 amend paragraph (b)(3) by removing the phrase ``and 
with respect to national banks, subpart M of part 19 of this chapter, 
and with respect to Federal savings associations Sec.  165.8 of this 
chapter'' and adding in its place the phrase ``and subpart M of part 19 
of this chapter''.


Sec.  6.4  [Amended]

0
7. In Sec.  6.4 amend paragraphs (d)(1) and (2) by removing the phrase 
``with respect to national banks and Sec.  165.8 of this chapter with 
respect to Federal savings associations'' each time it appears.


Sec.  6.5  [Amended]

0
8. Section 6.5 is amended by:
0
a. In paragraphs (a)(1) and (b), removing the phrase ``with respect to 
national banks, and Sec. Sec.  6.4 and 165.8 of this chapter with 
respect to Federal savings associations,'' each time it appears.
0
b. In paragraph (a)(2), removing the phrase ``with respect to national 
banks and Sec. Sec.  6.4 and 165.8 of this chapter with respect to 
Federal savings associations,''.


Sec.  6.6  [Amended]

0
9. Section 6.6 is amended in paragraph (b) by removing the phrase 
``with respect to national banks and subpart B of this part and Sec.  
165.9 of this chapter with respect to Federal savings associations''.

[[Page 89843]]


0
10. Part 19 is revised to read as follows:

PART 19--RULES OF PRACTICE AND PROCEDURE

Sec.
19.0 Applicability date.
Subpart A--Uniform Rules of Practice and Procedure
19.1 Scope.
19.2 Rules of construction.
19.3 Definitions.
19.4 Authority of the Comptroller.
19.5 Authority of the administrative law judge (ALJ).
19.6 Appearance and practice in adjudicatory proceedings.
19.7 Good faith certification.
19.8 Conflicts of interest.
19.9 Ex parte communications.
19.10 Filing of papers.
19.11 Service of papers.
19.12 Construction of time limits.
19.13 Change of time limits.
19.14 Witness fees and expenses.
19.15 Opportunity for informal settlement.
19.16 OCC's right to conduct examination.
19.17 Collateral attacks on adjudicatory proceeding.
19.18 Commencement of proceeding and contents of notice.
19.19 Answer.
19.20 Amended pleadings.
19.21 Failure to appear.
19.22 Consolidation and severance of actions.
19.23 Motions.
19.24 Scope of document discovery.
19.25 Request for document discovery from parties.
19.26 Document subpoenas to nonparties.
19.27 Deposition of witness unavailable for hearing.
19.28 Interlocutory review.
19.29 Summary disposition.
19.30 Partial summary disposition.
19.31 Scheduling and prehearing conferences.
19.32 Prehearing submissions.
19.33 Public hearings.
19.34 Hearing subpoenas.
19.35 Conduct of hearings.
19.36 Evidence.
19.37 Post-hearing filings.
19.38 Recommended decision and filing of record.
19.39 Exceptions to recommended decision.
19.40 Review by the Comptroller.
19.41 Stays pending judicial review.
Subpart B--Procedural Rules for OCC Adjudications
19.100 Filing documents.
19.101 Delegation to OFIA.
19.102 Civil money penalties.
Subpart C--Removals, Suspensions, and Prohibitions of an Institution-
Affiliated Party When a Crime Is Charged or a Conviction Is Obtained
19.110 Scope and definitions.
19.111 Suspension, removal, or prohibition of institution-affiliated 
party.
19.112 Informal hearing.
19.113 Recommended and final decisions.
Subpart D--Actions Under the Federal Securities Laws
19.120 Exemption hearings under section 12(h) of the Securities 
Exchange Act of 1934.
19.121 Disciplinary proceedings.
19.122 Civil money penalty authority under Federal securities laws.
19.123 Cease-and-desist authority.
Subpart E Through G--Reserved
Subpart H--Change in Bank Control
19.160 Scope.
19.161 Hearing process.
Subpart I--Discovery Depositions and Subpoenas
19.170 Discovery depositions.
19.171 Deposition subpoenas.
Subpart J--Formal Investigations
19.180 Scope.
19.181 Confidentiality of formal investigations.
19.182 Order to conduct a formal investigation.
19.183 Rights of witnesses.
19.184 Service of subpoena and payment of witness expenses.
19.185 Dilatory, obstructionist, or insubordinate conduct.
Subpart K--Parties and Representational Practice Before the OCC; 
Standards of Conduct
19.190 Scope.
19.191 Definitions.
19.192 Sanctions relating to conduct in an adjudicatory proceeding.
19.193 Censure, suspension, or debarment.
19.194 Eligibility of attorneys and accountants to practice.
19.195 Incompetence.
19.196 Disreputable conduct.
19.197 Initiation of disciplinary proceeding.
19.198 Conferences.
19.199 Proceedings under this subpart.
19.200 Effect of debarment, suspension, or censure.
19.201 Petition for reinstatement.
Subpart L--Equal Access to Justice Act
19.205 Authority and scope; waiver.
19.206 Definitions.
19.207 Application requirements.
19.208 Net worth exhibit.
19.209 Documentation of fees and expenses.
19.210 Filing and service of documents.
19.211 Answer to application.
19.212 Reply.
19.213 Settlement.
19.214 Further proceedings.
19.215 Decision.
19.216 Agency review.
19.217 Judicial review.
19.218 Stay of decision concerning award.
19.219 Payment of award.
Subpart M--Procedures for Reclassifying an Insured Depository 
Institution Based on Criteria Other Than Capital Under Prompt 
Corrective Action
19.220 Scope.
19.221 Reclassification of an insured depository institution based 
on unsafe or unsound condition or practice.
19.222 Request for rescission of reclassification.
Subpart N--Order To Dismiss a Director or Senior Executive Officer 
Under Prompt Corrective Action
19.230 Scope.
19.231 Order to dismiss a director or senior executive officer.
Subpart O--Civil Money Penalty Inflation Adjustments
19.240 Inflation adjustments.
Subpart P--Removal, Suspension, and Debarment of Accountants From 
Performing Audit Services
19.241 Scope.
19.242 Definitions.
19.243 Removal, suspension, or debarment.
19.244 Automatic removal, suspension, or debarment.
19.245 Notice of removal, suspension, or debarment.
19.246 Petition for reinstatement.
Subpart Q--Forfeiture of Franchise for Money Laundering or Cash 
Transaction Reporting Offenses
19.250 Scope.
19.251 Notice and hearing.
19.252 Presiding officer.
19.253 Grounds for termination.
19.254 Judicial review.
Appendix A to Part 19--Rules of Practice and Procedure

    Authority:  5 U.S.C. 504, 554-557; 12 U.S.C. 93, 93a, 161, 164, 
481, 504, 1462a, 1463(a), 1464; 1467(d), 1467a(r), 1817(j), 1818, 
1820, 1831m, 1831o, 1832, 1884, 1972, 3102, 3108, 3110, 3349, 3909, 
4717, and 5412(b)(2)(B); 15 U.S.C. 78l, 78o-4, 78o-5, 78q-1, 78s, 
78u, 78u-2, 78u-3, 78w, and 1639e; 28 U.S.C. 2461; 31 U.S.C. 330 and 
5321; and 42 U.S.C. 4012a.


Sec.  19.0  Applicability date.

    Subparts A through D and H, I, J, L, M, N, P, and Q of this part 
apply to adjudicatory proceedings initiated on or after April 1, 2024. 
The Rules of Practice and Procedure for national banks, Federal savings 
associations, and Federal branches and agencies that were in effect 
prior to April 1, 2024, set forth in appendix A to this part, continue 
to apply to adjudicatory proceedings initiated before April 1, 2024, 
unless the parties otherwise stipulate that the rules in this part, 
effective April 1, 2024, apply.

Subpart A--Uniform Rules of Practice and Procedure


Sec.  19.1  Scope.

    This subpart prescribes Uniform Rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record

[[Page 89844]]

after opportunity for a hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal 
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the Office of the 
Comptroller of the Currency (``OCC'') should issue an order to approve 
or disapprove a person's proposed acquisition of an institution;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions 
upon any government securities broker or dealer or upon any person 
associated or seeking to become associated with a government securities 
broker or dealer for which the OCC is the appropriate agency;
    (e) Assessment of civil money penalties by the OCC against 
institutions, institution-affiliated parties, and certain other persons 
for which it is the appropriate agency for any violation of:
    (1) Any provision of law referenced in 12 U.S.C. 93, or any 
regulation issued thereunder, and certain unsafe or unsound practices 
and breaches of fiduciary duty, pursuant to 12 U.S.C. 93;
    (2) Sections 22 and 23 of the Federal Reserve Act (``FRA''), or any 
regulation issued thereunder, and certain unsafe or unsound practices 
and breaches of fiduciary duty, pursuant to 12 U.S.C. 504 and 505;
    (3) Section 106(b) of the Bank Holding Company Amendments of 1970, 
pursuant to 12 U.S.C. 1972(2)(F);
    (4) Any provision of the Change in Bank Control Act of 1978 or any 
regulation or order issued thereunder, and certain unsafe or unsound 
practices and breaches of fiduciary duty, pursuant to 12 U.S.C. 
1817(j)(16);
    (5) Any provision of the International Lending Supervision Act of 
1983 (``ILSA''), or any rule, regulation or order issued thereunder, 
pursuant to 12 U.S.C. 3909;
    (6) Any provision of the International Banking Act of 1978 
(``IBA''), or any rule, regulation or order issued thereunder, pursuant 
to 12 U.S.C. 3108;
    (7) Section 5211 of the Revised Statutes (12 U.S.C. 161), pursuant 
to 12 U.S.C. 164;
    (8) Certain provisions of the Exchange Act, pursuant to section 21B 
of the Exchange Act (15 U.S.C. 78u-2);
    (9) Section 1120 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (``FIRREA'') (12 U.S.C. 3349), or any order 
or regulation issued thereunder;
    (10) The terms of any final or temporary order issued under section 
8 of the FDIA or any written agreement executed by the OCC or the 
former Office of Thrift Supervision (OTS), the terms of any condition 
imposed in writing by the OCC or the former OTS in connection with the 
grant of an application or request, certain unsafe or unsound 
practices, breaches of fiduciary duty, or any law or regulation not 
otherwise provided in this section, pursuant to 12 U.S.C. 1818(i)(2);
    (11) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder;
    (12) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued thereunder;
    (13) Section 5 of the Home Owners' Loan Act (HOLA) or any 
regulation or order issued thereunder, pursuant to 12 U.S.C. 1464(d), 
(s), and (v);
    (14) Section 9 of the HOLA or any regulation or order issued 
thereunder, pursuant to 12 U.S.C. 1467(d); and
    (15) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a(r);
    (f) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g));
    (g) Removal, prohibition, and civil monetary penalty proceedings 
under section 10(k) of the FDIA (12 U.S.C. 1820(k)) for violations of 
the post-employment restrictions imposed by section 10(k); and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules (see Sec.  19.3(j)).


Sec.  19.2  Rules of construction.

    For purposes of this part:
    (a) Any term in the singular includes the plural, and the plural 
includes the singular, if such use would be appropriate;
    (b) The term counsel includes a non-attorney representative; and
    (c) Unless the context requires otherwise, a party's counsel of 
record, if any, may, on behalf of that party, take any action required 
to be taken by the party.


Sec.  19.3  Definitions.

    For purposes of this part, unless explicitly stated to the 
contrary:
    (a) Administrative law judge (ALJ) means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (c) Comptroller means the Comptroller of the Currency or a person 
delegated to perform the functions of the Comptroller of the Currency.
    (d) Decisional employee means any member of the Comptroller's or 
ALJ's staff who has not engaged in an investigative or prosecutorial 
role in a proceeding and who may assist the Comptroller or the ALJ, 
respectively, in preparing orders, recommended decisions, decisions, 
and other documents under the Uniform Rules.
    (e) Electronic signature means electronically affixing the 
equivalent of a signature to an electronic document filed or 
transmitted electronically.
    (f) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the OCC in an adjudicatory 
proceeding.
    (g) Final order means an order issued by the Comptroller with or 
without the consent of the affected institution or the institution-
affiliated party, that has become final, without regard to the pendency 
of any petition for reconsideration or review.
    (h) Institution includes any national bank, Federal savings 
association, or Federal branch or agency of a foreign bank.
    (i) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 3(u) of the FDIA (12 U.S.C. 
1813(u)).
    (j) Local Rules means those rules promulgated by the OCC in the 
subparts of this part excluding this subpart.
    (k) OCC means the Office of the Comptroller of the Currency.
    (l) OFIA means the Office of Financial Institution Adjudication, 
the executive body charged with overseeing the administration of 
administrative enforcement proceedings for the OCC, the Board of 
Governors of the Federal Reserve System (``Board of Governors''), the 
Federal Deposit Insurance Corporation (``FDIC''), and the National 
Credit Union Administration (``NCUA'').
    (m) Party means the OCC and any person named as a party in any 
notice.
    (n) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency, or other entity or organization, including an 
institution as defined in paragraph (h) this section.
    (o) Respondent means any party other than the OCC.
    (p) Uniform Rules means those rules in this subpart that are common 
to the

[[Page 89845]]

OCC, the Board of Governors, the FDIC, and the NCUA.
    (q) Violation means any violation as that term is defined in 
section 3(v) of the FDIA (12 U.S.C. 1813(v)).


Sec.  19.4  Authority of the Comptroller.

    The Comptroller may, at any time during the pendency of a 
proceeding, perform, direct the performance of, or waive performance 
of, any act which could be done or ordered by the ALJ.


Sec.  19.5  Authority of the administrative law judge (ALJ).

    (a) General rule. All proceedings governed by this part must be 
conducted in accordance with the provisions of 5 U.S.C. chapter 5. The 
ALJ has all powers necessary to conduct a proceeding in a fair and 
impartial manner and to avoid unnecessary delay.
    (b) Powers. The ALJ has all powers necessary to conduct the 
proceeding in accordance with paragraph (a) of this section, including 
the following powers:
    (1) To administer oaths and affirmations;
    (2) To issue subpoenas, subpoenas duces tecum, protective orders, 
and other orders, as authorized by this part, and to quash or modify 
any such subpoenas and orders;
    (3) To receive relevant evidence and to rule upon the admission of 
evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
subpart;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling and/or pre-hearing conferences as set forth 
in Sec.  19.31;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the 
Comptroller has the power to grant any motion to dismiss the proceeding 
or to decide any other motion that results in a final determination of 
the merits of the proceeding;
    (8) To prepare and present to the Comptroller a recommended 
decision as provided in this part;
    (9) To recuse oneself by motion made by a party or on the ALJ's own 
motion;
    (10) To establish time, place and manner limitations on the 
attendance of the public and the media for any public hearing; and
    (11) To do all other things necessary and appropriate to discharge 
the duties of an ALJ.


Sec.  19.6  Appearance and practice in adjudicatory proceedings.

    (a) Appearance before the OCC or an ALJ--(1) By attorneys. Any 
member in good standing of the bar of the highest court of any state, 
commonwealth, possession, territory of the United States, or the 
District of Columbia may represent others before the OCC if such 
attorney is not currently suspended or debarred from practice before 
the OCC.
    (2) By non-attorneys. An individual may appear on the individual's 
own behalf.
    (3) Notice of appearance.--(i) Any individual acting on the 
individual's own behalf or as counsel on behalf of a party, including 
the OCC, must file a notice of appearance with OFIA at or before the 
time that the individual submits papers or otherwise appears on behalf 
of a party in the adjudicatory proceeding. The notice of appearance 
must include:
    (A) A written declaration that the individual is currently 
qualified as provided in paragraphs (a)(1) or (2) of this section and 
is authorized to represent the particular party; and
    (B) A written acknowledgement that the individual has reviewed and 
will comply with the Uniform Rules and Local Rules in subpart B of this 
part.
    (ii) By filing a notice of appearance on behalf of a party in an 
adjudicatory proceeding, the counsel agrees and represents that the 
counsel is authorized to accept service on behalf of the represented 
party and that, in the event of withdrawal from representation, the 
counsel will, if required by the ALJ, continue to accept service until 
new counsel has filed a notice of appearance or until the represented 
party indicates that the party will proceed on a pro se basis.
    (b) Sanctions. Dilatory, obstructionist, egregious, contemptuous, 
or contumacious conduct at any phase of any adjudicatory proceeding may 
be grounds for exclusion or suspension of counsel from the proceeding.


Sec.  19.7  Good faith certification.

    (a) General requirement. Every filing or submission of record 
following the issuance of a notice must be signed by at least one 
counsel of record in the counsel's individual name and must state that 
counsel's mailing address, electronic mail address, and telephone 
number. A party who acts as the party's own counsel must sign that 
person's individual name and state that person's mailing address, 
electronic mail address, and telephone number on every filing or 
submission of record. Electronic signatures may be used to satisfy the 
signature requirements of this section.
    (b) Effect of signature.--(1) The signature of counsel or a party 
will constitute a certification that: the counsel or party has read the 
filing or submission of record; to the best of the counsel's or party's 
knowledge, information, and belief formed after reasonable inquiry, the 
filing or submission of record is well-grounded in fact and is 
warranted by existing law or a good faith argument for the extension, 
modification, or reversal of existing law; and the filing or submission 
of record is not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.
    (2) If a filing or submission of record is not signed, the ALJ will 
strike the filing or submission of record, unless it is signed promptly 
after the omission is called to the attention of the pleader or movant.
    (c) Effect of making oral motion or argument. The act of making any 
oral motion or oral argument by any counsel or party constitutes a 
certification that to the best of the counsel's or party's knowledge, 
information, and belief formed after reasonable inquiry, the counsel's 
or party's statements are well-grounded in fact and are warranted by 
existing law or a good faith argument for the extension, modification, 
or reversal of existing law, and are not made for any improper purpose, 
such as to harass or to cause unnecessary delay or needless increase in 
the cost of litigation.


Sec.  19.8  Conflicts of interest.

    (a) Conflict of interest in representation. No person may appear as 
counsel for another person in an adjudicatory proceeding if it 
reasonably appears that such representation may be materially limited 
by that counsel's responsibilities to a third person or by the 
counsel's own interests. The ALJ may take corrective measures at any 
stage of a proceeding to cure a conflict of interest in representation, 
including the issuance of an order limiting the scope of representation 
or disqualifying an individual from appearing in a representative 
capacity for the duration of the proceeding.
    (b) Certification and waiver. If any person appearing as counsel 
represents two or more parties to an adjudicatory proceeding or also 
represents a non-party on a matter relevant to an issue in the 
proceeding, counsel must certify in writing at the time of filing the 
notice of appearance required by Sec.  19.6(a):
    (1) That the counsel has personally and fully discussed the 
possibility of conflicts of interest with each such party and non-
party; and
    (2) That each such party and non-party waives any right it might

[[Page 89846]]

otherwise have had to assert any known conflicts of interest or to 
assert any non-material conflicts of interest during the course of the 
proceeding.


Sec.  19.9  Ex parte communications.

    (a) Definition--(1) Ex parte communication. Ex parte communication 
means any material oral or written communication relevant to the merits 
of an adjudicatory proceeding that was neither on the record nor on 
reasonable prior notice to all parties that takes place between:
    (i) An interested person outside the OCC (including such person's 
counsel); and
    (ii) The ALJ handling that proceeding, the Comptroller, or a 
decisional employee.
    (2) Exception. A request for status of the proceeding does not 
constitute an ex parte communication.
    (b) Prohibition of ex parte communications. From the time the 
notice is issued by the Comptroller until the date that the Comptroller 
issues a final decision pursuant to Sec.  19.40(c):
    (1) An interested person outside the OCC must not make or knowingly 
cause to be made an ex parte communication to the Comptroller, the ALJ, 
or a decisional employee; and
    (2) The Comptroller, ALJ, or decisional employee may not make or 
knowingly cause to be made to any interested person outside the OCC any 
ex parte communication.
    (c) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the ALJ, the Comptroller, or any 
other person identified in paragraph (a) of this section, that person 
will cause all such written communications (or, if the communication is 
oral, a memorandum stating the substance of the communication) to be 
placed on the record of the proceeding and served on all parties. All 
other parties to the proceeding may, within ten days of service of the 
ex parte communication, file responses thereto and to recommend any 
sanctions that they believe to be appropriate under the circumstances. 
The ALJ or the Comptroller then determines whether any action should be 
taken concerning the ex parte communication in accordance with 
paragraph (d) of this section.
    (d) Sanctions. Any party or counsel to a party who makes a 
prohibited ex parte communication, or who encourages or solicits 
another to make any such communication, may be subject to any 
appropriate sanction or sanctions imposed by the Comptroller or the ALJ 
including, but not limited to, exclusion from the proceedings and an 
adverse ruling on the issue which is the subject of the prohibited 
communication.
    (e) Separation of functions--(1) In general. Except to the extent 
required for the disposition of ex parte matters as authorized by law, 
the ALJ may not:
    (i) Consult a person or party on a fact in issue unless on notice 
and opportunity for all parties to participate; or
    (ii) Be responsible to or subject to the supervision or direction 
of an employee or agent engaged in the performance of investigative or 
prosecuting functions for the OCC.
    (2) Decision process. An employee or agent engaged in the 
performance of investigative or prosecuting functions for the OCC in a 
case may not, in that or a factually related case, participate or 
advise in the decision, recommended decision, or agency review of the 
recommended decision under Sec.  19.40, except as witness or counsel in 
administrative or judicial proceedings.


Sec.  19.10  Filing of papers.

    (a) Filing. Any papers required to be filed, excluding documents 
produced in response to a discovery request pursuant to Sec. Sec.  
19.25 and 19.26, must be filed with OFIA, except as otherwise provided.
    (b) Manner of filing. Unless otherwise specified by the Comptroller 
or the ALJ, filing may be accomplished by:
    (1) Electronic mail or other electronic means designated by the 
Comptroller or the ALJ;
    (2) Personal service;
    (3) Delivering the papers to a same day courier service or 
overnight delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) Formal requirements as to papers filed--(1) Form. All papers 
filed must set forth the name, mailing address, electronic mail 
address, and telephone number of the counsel or party making the filing 
and must be accompanied by a certification setting forth when and how 
service has been made on all other parties. All papers filed must be 
double-spaced and printed or typewritten on an 8\1/2\ x 11 inch page 
and must be clear and legible.
    (2) Signature. All papers must be dated and signed as provided in 
Sec.  19.7.
    (3) Caption. All papers filed must include at the head thereof, or 
on a title page, the name of the OCC and of the filing party, the title 
and docket number of the proceeding, and the subject of the particular 
paper.


Sec.  19.11  Service of papers.

    (a) By the parties. Except as otherwise provided, a party filing 
papers must serve a copy upon the counsel of record for all other 
parties to the proceeding so represented, and upon any party not so 
represented.
    (b) Method of service. Except as provided in paragraphs (c)(2) and 
(d) of this section, a serving party must use one of the following 
methods of service:
    (1) Electronic mail or other electronic means;
    (2) Personal service;
    (3) Delivering the papers by same day courier service or overnight 
delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) By the Comptroller or the ALJ.--(1) All papers required to be 
served by the Comptroller or the ALJ upon a party who has appeared in 
the proceeding in accordance with Sec.  19.6 will be served by 
electronic mail or other electronic means designated by the Comptroller 
or ALJ.
    (2) If a respondent has not appeared in the proceeding in 
accordance with Sec.  19.6, the Comptroller or the ALJ will serve the 
respondent by any of the following methods:
    (i) By personal service;
    (ii) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (iii) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
respondent;
    (iv) By registered or certified mail, delivery by a same day 
courier service, or by an overnight delivery service to the 
respondent's last known mailing address; or
    (v) By any other method reasonably calculated to give actual 
notice.
    (d) Subpoenas. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (3) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
party;
    (4) By registered or certified mail, delivery by a same day courier 
service,

[[Page 89847]]

or by an overnight delivery service to the person's last known mailing 
address; or
    (5) By any other method reasonably calculated to give actual 
notice.
    (e) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing is held, provided that if service is made on a 
foreign bank in connection with an action or proceeding involving one 
or more of its branches or agencies located in any state, territory, 
possession of the United States, or the District of Columbia, service 
must be made on at least one branch or agency so involved.


Sec.  19.12  Construction of time limits.

    (a) General rule. In computing any period of time prescribed by 
this subpart, the date of the act or event that commences the 
designated period of time is not included. The last day so computed is 
included unless it is a Saturday, Sunday, or Federal holiday. When the 
last day is a Saturday, Sunday, or Federal holiday, the period runs 
until the end of the next day that is not a Saturday, Sunday, or 
Federal holiday. Intermediate Saturdays, Sundays, and Federal holidays 
are included in the computation of time. However, when the time period 
within which an act is to be performed is ten days or less, not 
including any additional time allowed for in paragraph (c) of this 
section, intermediate Saturdays, Sundays, and Federal holidays are not 
included.
    (b) When papers are deemed to be filed or served.--(1) Filing and 
service are deemed to be effective:
    (i) In the case of transmission by electronic mail or other 
electronic means, upon transmittal by the serving party;
    (ii) In the case of overnight delivery service or first class, 
registered, or certified mail, upon deposit in or delivery to an 
appropriate point of collection; or
    (iii) In the case of personal service or same day courier delivery, 
upon actual service.
    (2) The effective filing and service dates specified in paragraph 
(b)(1) of this section may be modified by the Comptroller or ALJ in the 
case of filing or by agreement of the parties in the case of service.
    (c) Calculation of time for service and filing of responsive 
papers. Whenever a time limit is measured by a prescribed period from 
the service of any notice or paper, the applicable time limits are 
calculated as follows:
    (1) If service is made by electronic mail or other electronic means 
or by same day courier delivery, add one calendar day to the prescribed 
period;
    (2) If service is made by overnight delivery service, add two 
calendar days to the prescribed period; or
    (3) If service is made by first class, registered, or certified 
mail, add three calendar days to the prescribed period.


Sec.  19.13  Change of time limits.

    Except as otherwise provided by law, the ALJ may, for good cause 
shown, extend the time limits prescribed by the Uniform Rules or by any 
notice or order issued in the proceedings. After the referral of the 
case to the Comptroller pursuant to Sec.  19.38, the Comptroller may 
grant extensions of the time limits for good cause shown. Extensions 
may be granted at the motion of a party after notice and opportunity to 
respond is afforded all non-moving parties or on the Comptroller's or 
the ALJ's own motion.


Sec.  19.14  Witness fees and expenses.

    (a) In general. A witness, including an expert witness, who 
testifies at a deposition or hearing will be paid the same fees for 
attendance and mileage as are paid in the United States district courts 
in proceedings in which the United States is a party, except as 
provided in paragraph (b) of this section and unless otherwise waived.
    (b) Exception for testimony by a party. In the case of testimony by 
a party, no witness fees or mileage need to be paid. The OCC will not 
be required to pay any fees to, or expenses of, any witness not 
subpoenaed by the OCC.
    (c) Timing of payment. Fees and mileage in accordance with this 
paragraph (c) must be paid in advance by the party requesting the 
subpoena, except that fees and mileage need not be tendered in advance 
where the OCC is the party requesting the subpoena.


Sec.  19.15  Opportunity for informal settlement.

    Any respondent may, at any time in the proceeding, unilaterally 
submit to Enforcement Counsel written offers or proposals for 
settlement of a proceeding, without prejudice to the rights of any of 
the parties. Any such offer or proposal may only be made to Enforcement 
Counsel. Submission of a written settlement offer does not provide a 
basis for adjourning or otherwise delaying all or any portion of a 
proceeding under this part. No settlement offer or proposal, or any 
subsequent negotiation or resolution, is admissible as evidence in any 
proceeding.


Sec.  19.16  OCC's right to conduct examination.

    Nothing contained in this subpart limits in any manner the right of 
the OCC to conduct any examination, inspection, or visitation of any 
institution or institution-affiliated party, or the right of the OCC to 
conduct or continue any form of investigation authorized by law.


Sec.  19.17  Collateral attacks on adjudicatory proceeding.

    If an interlocutory appeal or collateral attack is brought in any 
court concerning all or any part of an adjudicatory proceeding, the 
challenged adjudicatory proceeding will continue without regard to the 
pendency of that court proceeding. No default or other failure to act 
as directed in the adjudicatory proceeding within the times prescribed 
in this subpart will be excused based on the pendency before any court 
of any interlocutory appeal or collateral attack.


Sec.  19.18  Commencement of proceeding and contents of notice.

    (a) Commencement of proceeding.--(1)(i) Except for change-in-
control proceedings under section 7(j)(4) of the FDIA, 12 U.S.C. 
1817(j)(4), a proceeding governed by this subpart is commenced by 
issuance of a notice by the Comptroller.
    (ii) The notice must be served by Enforcement Counsel upon the 
respondent and given to any other appropriate financial institution 
supervisory authority where required by law. Enforcement Counsel may 
serve the notice upon counsel for the respondent, provided that 
Enforcement Counsel has confirmed that counsel represents the 
respondent in the matter and will accept service of the notice on 
behalf of the respondent.
    (iii) Enforcement Counsel must file the notice with OFIA.
    (2) Change-in control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the 
Comptroller.
    (b) Contents of notice. Notice pleading applies. The notice must 
provide:
    (1) The legal authority for the proceeding and for the OCC's 
jurisdiction over the proceeding;
    (2) Matters of fact or law showing that the OCC is entitled to 
relief;
    (3) A proposed order or prayer for an order granting the requested 
relief;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;

[[Page 89848]]

    (5) The time within which to file an answer as required by law or 
regulation;
    (6) The time within which to request a hearing as required by law 
or regulation; and
    (7) That the answer and/or request for a hearing must be filed with 
OFIA.


Sec.  19.19  Answer.

    (a) When. Within 20 days of service of the notice, respondent must 
file an answer as designated in the notice. In a civil money penalty 
proceeding, respondent must also file a request for a hearing within 20 
days of service of the notice.
    (b) Content of answer. An answer must specifically respond to each 
paragraph or allegation of fact contained in the notice and must admit, 
deny, or state that the respondent lacks sufficient information to 
admit or deny each allegation of fact. A statement of lack of 
information has the effect of a denial. Denials must fairly meet the 
substance of each allegation of fact denied; general denials are not 
permitted. When a respondent denies part of an allegation, that part 
must be denied and the remainder specifically admitted. Any allegation 
of fact in the notice which is not denied in the answer is deemed 
admitted for purposes of the proceeding. A respondent is not required 
to respond to the portion of a notice that constitutes the prayer for 
relief or proposed order. The answer must set forth affirmative 
defenses, if any, asserted by the respondent.
    (c) Default--(1) Effect of failure to answer. Failure of a 
respondent to file an answer required by this section within the time 
provided constitutes a waiver of the respondent's right to appear and 
contest the allegations in the notice. If no timely answer is filed, 
Enforcement Counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the ALJ will file with the Comptroller a 
recommended decision containing the findings and the relief sought in 
the notice. Any final order issued by the Comptroller based upon a 
respondent's failure to answer is deemed to be an order issued upon 
consent.
    (2) Effect of failure to request a hearing in civil money penalty 
proceedings. If respondent fails to request a hearing as required by 
law within the time provided, the notice of assessment constitutes a 
final and unappealable order of the Comptroller without further action 
by the ALJ.


Sec.  19.20  Amended pleadings.

    (a) Amendments. The notice or answer may be amended or supplemented 
at any stage of the proceeding. The respondent must answer an amended 
notice within the time remaining for the respondent's answer to the 
original notice, or within ten days after service of the amended 
notice, whichever period is longer, unless the Comptroller or ALJ 
orders otherwise for good cause.
    (b) Amendments to conform to the evidence. When issues not raised 
in the notice or answer are tried at the hearing by express or implied 
consent of the parties, they will be treated in all respects as if they 
had been raised in the notice or answer, and no formal amendments are 
required. If evidence is objected to at the hearing on the ground that 
it is not within the issues raised by the notice or answer, the ALJ may 
admit the evidence when admission is likely to assist in adjudicating 
the merits of the action and the objecting party fails to satisfy the 
ALJ that the admission of such evidence would unfairly prejudice that 
party's action or defense upon the merits. The ALJ may grant a 
continuance to enable the objecting party to meet such evidence.


Sec.  19.21  Failure to appear.

    Failure of a respondent to appear in person at the hearing or by a 
duly authorized counsel constitutes a waiver of respondent's right to a 
hearing and is deemed an admission of the facts as alleged and consent 
to the relief sought in the notice. Without further proceedings or 
notice to the respondent, the ALJ will file with the Comptroller a 
recommended decision containing the findings and the relief sought in 
the notice.


Sec.  19.22  Consolidation and severance of actions.

    (a) Consolidation.--(1) On the motion of any party, or on the ALJ's 
own motion, the ALJ may consolidate, for some or all purposes, any two 
or more proceedings, if each such proceeding involves or arises out of 
the same transaction, occurrence, or series of transactions or 
occurrences, or involves at least one common respondent or a material 
common question of law or fact, unless such consolidation would cause 
unreasonable delay or injustice.
    (2) In the event of consolidation under paragraph (a)(1) of this 
section, appropriate adjustment to the prehearing schedule must be made 
to avoid unnecessary expense, inconvenience, or delay.
    (b) Severance. The ALJ may, upon the motion of any party, sever the 
proceeding for separate resolution of the matter as to any respondent 
only if the ALJ finds:
    (1) Undue prejudice or injustice to the moving party would result 
from not severing the proceeding; and
    (2) Such undue prejudice or injustice would outweigh the interests 
of judicial economy and expedition in the complete and final resolution 
of the proceeding.


Sec.  19.23  Motions.

    (a) In writing.--(1) Except as otherwise provided in this section, 
an application or request for an order or ruling must be made by 
written motion.
    (2) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.
    (3) No oral argument may be held on written motions except as 
otherwise directed by the ALJ. Written memoranda, briefs, affidavits, 
or other relevant material or documents may be filed in support of or 
in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the ALJ directs that such motion be reduced to writing.
    (c) Filing of motions. Motions must be filed with the ALJ, except 
that following the filing of the recommended decision, motions must be 
filed with the Comptroller.
    (d) Responses.--(1) Except as otherwise provided in this section, 
within ten days after service of any written motion, or within such 
other period of time as may be established by the ALJ or the 
Comptroller, any party may file a written response to a motion. The ALJ 
will not rule on any oral or written motion before each party has had 
an opportunity to file a response.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed a consent by that party to the 
entry of an order substantially in the form of the order accompanying 
the motion.
    (e) Dilatory motions. Frivolous, dilatory or repetitive motions are 
prohibited. The filing of such motions may form the basis for 
sanctions.
    (f) Dispositive motions. Dispositive motions are governed by 
Sec. Sec.  19.29 and 19.30.


Sec.  19.24  Scope of document discovery.

    (a) Limits on discovery--(1) Subject to the limitations set out in 
paragraphs (b) through (d) of this section, a party to a proceeding 
under this subpart may obtain document discovery by serving a written 
request to produce documents. For purposes of a request to produce

[[Page 89849]]

documents, the term documents includes writings, drawings, graphs, 
charts, photographs, recordings, electronically stored information, and 
other data or data compilations stored in any medium from which 
information can be obtained either directly or, if necessary, after 
translation by the responding party, into a reasonably usable form.
    (2) Discovery by use of deposition is governed by subpart I of this 
part.
    (3) Discovery by use of either interrogatories or requests for 
admission is not permitted.
    (4) Any request to produce documents that calls for irrelevant 
material; or that is unreasonable, oppressive, excessive in scope, 
unduly burdensome, or repetitive of previous requests, or that seeks to 
obtain privileged documents will be denied or modified. A request is 
unreasonable, oppressive, excessive in scope, or unduly burdensome if, 
among other things, it fails to include justifiable limitations on the 
time period covered and the geographic locations to be searched, or the 
time provided to respond in the request is inadequate.
    (b) Relevance. A party may obtain document discovery regarding any 
non-privileged matter that has material relevance to the merits of the 
pending action.
    (c) Privileged matter. Privileged documents are not discoverable. 
Privileges include the attorney-client privilege, attorney work-product 
doctrine, bank examination privilege, law enforcement privilege, any 
government's or government agency's deliberative process privilege, and 
any other privileges the Constitution, any applicable act of Congress, 
or the principles of common law provide.
    (d) Time limits. All document discovery, including all responses to 
discovery requests, must be completed by the date set by the ALJ and no 
later than 30 days prior to the date scheduled for the commencement of 
the hearing, except as provided in the Local Rules. No exceptions to 
this time limit are permitted, unless the ALJ finds on the record that 
good cause exists for waiving the requirements of paragraph (d).


Sec.  19.25  Request for document discovery from parties.

    (a) Document requests.--(1) Any party may serve on any other party 
a request to produce and permit the requesting party or its 
representative to inspect or copy any discoverable documents that are 
in the possession, custody, or control of the party upon whom the 
request is served. In the case of a request for inspection, the 
responding party may produce copies of documents or of electronically 
stored information instead of permitting inspection.
    (2) The request:
    (i) Must describe with reasonable particularity each item or 
category of items to be inspected or produced; and
    (ii) Must specify a reasonable time, place, and manner for the 
inspection or production.
    (b) Production or copying--(1) General. Unless otherwise specified 
by the ALJ or agreed upon by the parties, the producing party must 
produce copies of documents as they are kept in the usual course of 
business or organized to correspond to the categories of the request, 
and electronically stored information must be produced in a form in 
which it is ordinarily maintained or in a reasonably usable form.
    (2) Costs. The producing party must pay its own costs to respond to 
a discovery request, unless otherwise agreed by the parties.
    (c) Obligation to update responses. A party who has responded to a 
discovery request with a response that was complete when made is not 
required to supplement the response to include documents thereafter 
acquired, unless the responding party learns:
    (1) The response was materially incorrect when made; or
    (2) The response, though correct when made, is no longer true and a 
failure to amend the response is, in substance, a knowing concealment.
    (d) Motions to limit discovery.--(1) Any party that objects to a 
discovery request may, within 20 days of being served with such 
request, file a motion in accordance with the provisions of Sec.  19.23 
to strike or otherwise limit the request. If an objection is made to 
only a portion of an item or category in a request, the portion 
objected to must be specified. Any objections not made in accordance 
with paragraph (d)(1) and Sec.  19.23 are waived.
    (2) The party who served the request that is the subject of a 
motion to strike or limit may file a written response within ten days 
of service of the motion. No other party may file a response.
    (e) Privilege. At the time other documents are produced, the 
producing party must reasonably identify all documents withheld on the 
grounds of privilege and must produce a statement of the basis for the 
assertion of privilege. When similar documents that are protected by 
attorney-client privilege, attorney work-product doctrine, bank 
examination privilege, law enforcement privilege, any government's or 
government agency's deliberative process privilege, or any other 
privileges of the Constitution, any applicable act of Congress, or the 
principles of common law, or are voluminous, these documents may be 
identified by category instead of by individual document. The ALJ 
retains discretion to determine when the identification by category is 
insufficient.
    (f) Motions to compel production.--(1) If a party withholds any 
documents as privileged or fails to comply fully with a discovery 
request, the requesting party may, within ten days of the assertion of 
privilege or of the time the failure to comply becomes known to the 
requesting party, file a motion in accordance with the provisions of 
Sec.  19.23 for the issuance of a subpoena compelling production.
    (2) The party who asserted the privilege or failed to comply with 
the document request may file a written response to a motion to compel 
within ten days of service of the motion. No other party may file a 
response.
    (g) Ruling on motions. After the time for filing responses pursuant 
to this section has expired, the ALJ will rule promptly on all motions 
filed pursuant to this section. If the ALJ determines that a discovery 
request, or any of its terms, calls for irrelevant material, is 
unreasonable, oppressive, excessive in scope, unduly burdensome, or 
repetitive of previous requests, or seeks to obtain privileged 
documents, the ALJ may deny or modify the request, and may issue 
appropriate protective orders, upon such conditions as justice may 
require. The pendency of a motion to strike or limit discovery or to 
compel production is not a basis for staying or continuing the 
proceeding, unless otherwise ordered by the ALJ. Notwithstanding any 
other provision in this part, the ALJ may not release, or order a party 
to produce, documents withheld on grounds of privilege if the party has 
stated to the ALJ its intention to file a timely motion for 
interlocutory review of the ALJ's order to produce the documents, and 
until the motion for interlocutory review has been decided.
    (h) Enforcing discovery subpoenas. If the ALJ issues a subpoena 
compelling production of documents by a party, the subpoenaing party 
may, in the event of noncompliance and to the extent authorized by 
applicable law, apply to any appropriate United States district court 
for an order requiring compliance with the subpoena. A party's right to 
seek court enforcement of a subpoena will not in any manner limit the 
sanctions that may be imposed by the ALJ against a party who fails to 
produce subpoenaed documents.

[[Page 89850]]

Sec.  19.26  Document subpoenas to nonparties.

    (a) General rules.--(1) Any party may apply to the ALJ for the 
issuance of a document discovery subpoena addressed to any person who 
is not a party to the proceeding. The application must contain a 
proposed document subpoena and a brief statement showing the general 
relevance and reasonableness of the scope of documents sought. The 
subpoenaing party must specify a reasonable time, place, and manner for 
making production in response to the document subpoena.
    (2) A party may apply for a document subpoena under this section 
only within the time period during which such party could serve a 
discovery request under Sec.  19.24(d). The party obtaining the 
document subpoena is responsible for serving it on the subpoenaed 
person and for serving copies on all parties. Document subpoenas may be 
served in any state, territory, or possession of the United States, the 
District of Columbia, or as otherwise provided by law.
    (3) The ALJ will promptly issue any document subpoena requested 
pursuant to this section. If the ALJ determines that the application 
does not set forth a valid basis for the issuance of the subpoena, or 
that any of its terms are unreasonable, oppressive, excessive in scope, 
or unduly burdensome, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon such conditions as may be consistent 
with the Uniform Rules.
    (b) Motion to quash or modify.--(1) Any person to whom a document 
subpoena is directed may file a motion to quash or modify such subpoena 
with the ALJ. The motion must be accompanied by a statement of the 
basis for quashing or modifying the subpoena. The movant must serve the 
motion on all parties, and any party may respond to such motion within 
ten days of service of the motion.
    (2) Any motion to quash or modify a document subpoena must be filed 
on the same basis, including the assertion of privilege, upon which a 
party could object to a discovery request under Sec.  19.25(d), and 
during the same time limits during which such an objection could be 
filed.
    (c) Enforcing document subpoenas. If a subpoenaed person fails to 
comply with any subpoena issued pursuant to this section or any order 
of the ALJ, which directs compliance with all or any portion of a 
document subpoena, the subpoenaing party or any other aggrieved party 
may, to the extent authorized by applicable law, apply to an 
appropriate United States district court for an order requiring 
compliance with so much of the document subpoena as the ALJ has not 
quashed or modified. A party's right to seek court enforcement of a 
document subpoena will in no way limit the sanctions that may be 
imposed by the ALJ on a party who induces a failure to comply with 
subpoenas issued under this section.


Sec.  19.27  Deposition of witness unavailable for hearing.

    (a) General rules.--(1) If a witness will not be available for the 
hearing, a party desiring to preserve that witness' testimony for the 
record may apply in accordance with the procedures set forth in 
paragraph (a)(2) of this section, to the ALJ for the issuance of a 
subpoena, including a subpoena duces tecum, requiring the attendance of 
the witness at a deposition. The ALJ may issue a deposition subpoena 
under this section upon showing:
    (i) The witness will be unable to attend or may be prevented from 
attending the hearing because of age, sickness or infirmity, or will 
otherwise be unavailable;
    (ii) The witness' unavailability was not procured or caused by the 
subpoenaing party;
    (iii) The testimony is reasonably expected to be material; and
    (iv) Taking the deposition will not result in any undue burden to 
any other party and will not cause undue delay of the proceeding.
    (2) The application must contain a proposed deposition subpoena and 
a brief statement of the reasons for the issuance of the subpoena. The 
subpoena must name the witness whose deposition is to be taken and 
specify the time, manner, and place for taking the deposition. A 
deposition subpoena may require the witness to be deposed at any place 
within the country in which that witness resides or has a regular place 
of employment, by remote means, or such other convenient place or 
manner, as the ALJ fixes.
    (3) Any requested subpoena that sets forth a valid basis for its 
issuance must be promptly issued, unless the ALJ requires a written 
response or requires attendance at a conference concerning whether the 
requested subpoena should be issued.
    (4) The party obtaining a deposition subpoena is responsible for 
serving it on the witness and for serving copies on all parties. Unless 
the ALJ orders otherwise, no deposition under this section may be taken 
on fewer than ten days' notice to the witness and all parties.
    (b) Objections to deposition subpoenas.--(1) The witness and any 
party who has not had an opportunity to oppose a deposition subpoena 
issued under this section may file a motion with the ALJ to quash or 
modify the subpoena prior to the time for compliance specified in the 
subpoena, but not more than ten days after service of the subpoena.
    (2) A statement of the basis for the motion to quash or modify a 
subpoena issued under this section must accompany the motion. The 
motion must be served on all parties.
    (c) Procedure upon deposition.--(1) Each witness testifying 
pursuant to a deposition subpoena must be duly sworn. By stipulation of 
the parties or by order of the ALJ, a court reporter or other person 
authorized to administer an oath may administer the oath remotely 
without being in the physical presence of the deponent. Each party must 
have the right to examine the witness. Objections to questions or 
documents must be in short form, stating the grounds for the objection. 
Failure to object to questions or documents is not deemed a waiver 
except where the ground for the objection might have been avoided if 
the objection had been timely presented. All questions, answers, and 
objections must be recorded.
    (2) Any party may move before the ALJ for an order compelling the 
witness to answer any questions the witness has refused to answer or 
submit any evidence the witness has refused to submit during the 
deposition.
    (3) The deposition must be subscribed by the witness, unless the 
parties and the witness, by stipulation, have waived the signing, or 
the witness is ill, cannot be found, or has refused to sign. If the 
deposition is not subscribed by the witness, the court reporter taking 
the deposition must certify that the transcript is a true and complete 
transcript of the deposition.
    (d) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section, or fails to comply 
with any order of the ALJ, which directs compliance with all or any 
portion of a deposition subpoena under paragraphs (b) or (c)(2) of this 
section, the subpoenaing party or other aggrieved party may, to the 
extent authorized by applicable law, apply to an appropriate United 
States district court for an order requiring compliance with the 
portions of the subpoena with which the subpoenaed party has not 
complied. A party's right to seek court enforcement of a deposition 
subpoena in no way limits the sanctions that may be imposed by the ALJ 
on a party who fails to comply with, or procures a failure to

[[Page 89851]]

comply with, a subpoena issued under this section.


Sec.  19.28  Interlocutory review.

    (a) General rule. The Comptroller may review a ruling of the ALJ 
prior to the certification of the record to the Comptroller only in 
accordance with the procedures set forth in this section and Sec.  
19.23.
    (b) Scope of review. The Comptroller may exercise interlocutory 
review of a ruling of the ALJ if the Comptroller finds:
    (1) The ruling involves a controlling question of law or policy as 
to which substantial grounds exist for a difference of opinion;
    (2) Immediate review of the ruling may materially advance the 
ultimate termination of the proceeding;
    (3) Subsequent modification of the ruling at the conclusion of the 
proceeding would be an inadequate remedy; or
    (4) Subsequent modification of the ruling would cause unusual delay 
or expense.
    (c) Procedure. Any request for interlocutory review must be filed 
by a party with the ALJ within ten days of the ruling and must 
otherwise comply with Sec.  19.23. Any party may file a response to a 
request for interlocutory review in accordance with Sec.  19.23(d). 
Upon the expiration of the time for filing all responses, the ALJ will 
refer the matter to the Comptroller for final disposition.
    (d) Suspension of proceeding. Neither a request for interlocutory 
review nor any disposition of such a request by the Comptroller under 
this section suspends or stays the proceeding unless otherwise ordered 
by the ALJ or the Comptroller.


Sec.  19.29  Summary disposition.

    (a) In general. The ALJ will recommend that the Comptroller issue a 
final order granting a motion for summary disposition if the undisputed 
pleaded facts, admissions, affidavits, stipulations, documentary 
evidence, matters as to which official notice may be taken, and any 
other evidentiary materials properly submitted in connection with a 
motion for summary disposition show:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.
    (b) Filing of motions and responses.--(1) Any party who believes 
there is no genuine issue of material fact to be determined and that 
the party is entitled to a decision as a matter of law may move at any 
time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 days after service of such a motion, 
or within such time period as allowed by the ALJ, may file a response 
to such motion.
    (2) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, investigatory depositions, transcripts, 
affidavits, and any other evidentiary materials that the moving party 
contends supports the moving party's position. The motion must also be 
accompanied by a brief containing the points and authorities in support 
of the contention of the moving party. Any party opposing a motion for 
summary disposition must file a statement setting forth those material 
facts as to which the opposing party contends a genuine dispute exists. 
Such opposition must be supported by evidence of the same type as that 
submitted with the motion for summary disposition and a brief 
containing the points and authorities in support of the contention that 
summary disposition would be inappropriate.
    (c) Hearing on motion. At the written request of any party or on 
the ALJ's own motion, the ALJ may hear oral argument on the motion for 
summary disposition.
    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the ALJ will determine whether 
the moving party is entitled to summary disposition. If the ALJ 
determines that summary disposition is warranted, the ALJ will submit a 
recommended decision to that effect to the Comptroller. If the ALJ 
finds that no party is entitled to summary disposition, the ALJ will 
make a ruling denying the motion.


Sec.  19.30  Partial summary disposition.

    If the ALJ determines that a party is entitled to summary 
disposition as to certain claims only, the ALJ will defer submitting a 
recommended decision as to those claims. A hearing on the remaining 
issues must be ordered. Those claims for which the ALJ has determined 
that summary disposition is warranted will be addressed in the 
recommended decision filed at the conclusion of the hearing.


Sec.  19.31  Scheduling and prehearing conferences.

    (a) Scheduling conference. Within 30 days of service of the notice 
or order commencing a proceeding, the ALJ will direct counsel for all 
parties to meet with the ALJ at a specified time and manner prior to 
the hearing for the purpose of scheduling the course and conduct of the 
proceeding. This meeting is called a ``scheduling conference.'' The 
schedule for the identification of potential witnesses, the time for 
and manner of discovery, and the exchange of any prehearing materials 
including witness lists, statements of issues, stipulations, exhibits, 
and any other materials may also be determined at the scheduling 
conference.
    (b) Prehearing conferences. The ALJ may, in addition to the 
scheduling conference, on the ALJ's own motion or at the request of any 
party, direct counsel for the parties to confer with the ALJ at a 
prehearing conference to address any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, 
authenticity and admissibility into evidence of documents;
    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes;
    (7) Amendments to pleadings; and
    (8) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (c) Transcript. The ALJ may require that a scheduling or prehearing 
conference be recorded by a court reporter. A transcript of the 
conference and any materials filed, including orders, becomes part of 
the record of the proceeding. A party may obtain a copy of the 
transcript at the party's expense.
    (d) Scheduling or prehearing orders. At or within a reasonable time 
following the conclusion of the scheduling conference or any prehearing 
conference, the ALJ will serve on each party an order setting forth any 
agreements reached and any procedural determinations made.


Sec.  19.32  Prehearing submissions.

    (a) Party prehearing submissions. Within the time set by the ALJ, 
but in no case later than 20 days before the start of the hearing, each 
party must file with the ALJ and serve on every other party:
    (1) A prehearing statement that states:
    (i) The party's position with respect to the legal issues 
presented;
    (ii) The statutory and case law upon which the party relies; and
    (iii) The facts that the party expects to prove at the hearing;

[[Page 89852]]

    (2) A final list of witnesses to be called to testify at the 
hearing, including the name, mailing address, and electronic mail 
address of each witness and a short summary of the expected testimony 
of each witness, which need not identify the exhibits to be relied upon 
by each witness at the hearing;
    (3) A list of the exhibits expected to be introduced at the hearing 
along with a copy of each exhibit; and
    (4) Stipulations of fact, if any.
    (b) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraph (a) of 
this section, except for good cause shown.


Sec.  19.33  Public hearings.

    (a) General rule. All hearings must be open to the public, unless 
the Comptroller in their discretion, determines that holding an open 
hearing would be contrary to the public interest. Within 20 days of 
service of the notice or, in the case of change-in-control proceedings 
under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), within 20 
days from service of the hearing order, any respondent may file with 
the Comptroller a request for a private hearing, and any party may file 
a reply to such a request. A party must serve on the ALJ a copy of any 
request or reply the party files with the Comptroller. The form of, and 
procedure for, these requests and replies are governed by Sec.  19.23. 
A party's failure to file a request or a reply constitutes a waiver of 
any objections regarding whether the hearing will be public or private.
    (b) Filing document under seal. Enforcement Counsel, in Enforcement 
Counsel's discretion, may file any document or part of a document under 
seal if disclosure of the document would be contrary to the public 
interest. The ALJ will take all appropriate steps to preserve the 
confidentiality of such documents or parts thereof, including closing 
portions of the hearing to the public.


Sec.  19.34  Hearing subpoenas.

    (a) Issuance.--(1) Upon application of a party showing general 
relevance and reasonableness of scope of the testimony or other 
evidence sought, the ALJ may issue a subpoena or a subpoena duces tecum 
requiring the attendance of a witness at the hearing or the production 
of documentary or physical evidence at the hearing. The application for 
a hearing subpoena must also contain a proposed subpoena specifying the 
attendance of a witness or the production of evidence from any state, 
territory, or possession of the United States, the District of 
Columbia, or as otherwise provided by law at any designated place where 
the hearing is being conducted. The party making the application must 
serve a copy of the application and the proposed subpoena on every 
other party.
    (2) A party may apply for a hearing subpoena at any time before the 
commencement of a hearing. During a hearing, a party may make an 
application for a subpoena orally on the record before the ALJ.
    (3) The ALJ will promptly issue any hearing subpoena requested 
pursuant to this section. If the ALJ determines that the application 
does not set forth a valid basis for the issuance of the subpoena, or 
that any of its terms are unreasonable, oppressive, excessive in scope, 
or unduly burdensome, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon any conditions consistent with this 
subpart. Upon issuance by the ALJ, the party making the application 
must serve the subpoena on the person named in the subpoena and on each 
party.
    (b) Motion to quash or modify.--(1) Any person to whom a hearing 
subpoena is directed or any party may file a motion to quash or modify 
the subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant must serve the motion on each party 
and on the person named in the subpoena. Any party may respond to the 
motion within ten days of service of the motion.
    (2) Any motion to quash or modify a hearing subpoena must be filed 
prior to the time specified in the subpoena for compliance but not more 
than ten days after the date of service of the subpoena upon the 
movant.
    (c) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section or any order of the 
ALJ which directs compliance with all or any portion of a document 
subpoena, the subpoenaing party or any other aggrieved party may seek 
enforcement of the subpoena pursuant to Sec.  19.26(c).


Sec.  19.35  Conduct of hearings.

    (a) General rules--(1) Conduct of hearings. Hearings must be 
conducted so as to provide a fair and expeditious presentation of the 
relevant disputed issues. Each party has the right to present its case 
or defense by oral and documentary evidence and to conduct such cross 
examination as may be required for full disclosure of the facts.
    (2) Order of hearing. Enforcement Counsel will present its case-in-
chief first, unless otherwise ordered by the ALJ, or unless otherwise 
expressly specified by law or regulation. Enforcement Counsel will be 
the first party to present an opening statement and a closing statement 
and may make a rebuttal statement after the respondent's closing 
statement. If there are multiple respondents, respondents may agree 
among themselves as to their order of presentation of their cases, but 
if they do not agree, the ALJ will fix the order.
    (3) Examination of witnesses. Only one counsel for each party may 
conduct an examination of a witness, except that in the case of 
extensive direct examination, the ALJ may permit more than one counsel 
for the party presenting the witness to conduct the examination. A 
party may have one counsel conduct the direct examination and another 
counsel conduct re-direct examination of a witness, or may have one 
counsel conduct the cross examination of a witness and another counsel 
conduct the re-cross examination of a witness.
    (4) Stipulations. Unless the ALJ directs otherwise, all 
stipulations of fact and law previously agreed upon by the parties, and 
all documents, the admissibility of which have been previously 
stipulated, will be admitted into evidence upon commencement of the 
hearing.
    (b) Transcript. The hearing must be recorded and transcribed. The 
reporter will make the transcript available to any party upon payment 
by that party to the reporter of the cost of the transcript. The ALJ 
may order the record corrected, either upon motion to correct, upon 
stipulation of the parties, or following notice to the parties upon the 
ALJ's own motion.
    (c) Electronic presentation. Based on the circumstances of each 
hearing, the ALJ may direct the use of, or any party may use, an 
electronic presentation during the hearing. If the ALJ requires an 
electronic presentation during the hearing, each party will be 
responsible for their own presentation and related costs, unless the 
parties agree to another manner in which to allocate presentation 
responsibilities and costs.


Sec.  19.36  Evidence.

    (a) Admissibility--(1) Except as is otherwise set forth in this 
section, relevant, material, and reliable evidence that is not unduly 
repetitive is admissible to the fullest extent authorized by the 
Administrative Procedure Act and other applicable law.
    (2) Evidence that would be admissible under the Federal Rules of 
Evidence is admissible in a proceeding conducted pursuant to this 
subpart.

[[Page 89853]]

    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence may not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant, 
material, reliable and not unduly repetitive.
    (b) Official notice--(1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court and any material information in the official public 
records of any Federal or State government agency.
    (2) All matters officially noticed by the ALJ or the Comptroller 
must appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, must be afforded an opportunity to 
object.
    (c) Documents--(1) A duplicate copy of a document is admissible to 
the same extent as the original, unless a genuine issue is raised as to 
whether the copy is in some material respect not a true and legible 
copy of the original.
    (2) Subject to the requirements of paragraph (a) of this section, 
any document, including a report of examination, supervisory activity, 
inspection, or visitation, prepared by an appropriate Federal financial 
institutions regulatory agency or by a State regulatory agency, is 
admissible either with or without a sponsoring witness.
    (3) Witnesses may use existing or newly created charts, exhibits, 
calendars, calculations, outlines, or other graphic material to 
summarize, illustrate, or simplify the presentation of testimony. Such 
materials may, subject to the ALJ's discretion, be used with or without 
being admitted into evidence.
    (d) Objections--(1) Objections to the admissibility of evidence 
must be timely made and rulings on all objections must appear on the 
record.
    (2) When an objection to a question or line of questioning 
propounded to a witness is sustained, the examining counsel may make a 
specific proffer on the record of what the examining counsel expected 
to prove by the expected testimony of the witness either by 
representation of counsel or by direct questioning of the witness.
    (3) The ALJ will retain rejected exhibits, adequately marked for 
identification, for the record, and transmit such exhibits to the 
Comptroller.
    (4) Failure to object to admission of evidence or to any ruling 
constitutes a waiver of the objection.
    (e) Stipulations. The parties may stipulate as to any relevant 
matters of fact or the authentication of any relevant documents. Such 
stipulations must be received in evidence at a hearing and are binding 
on the parties with respect to the matters therein stipulated.
    (f) Depositions of unavailable witnesses--(1) If a witness is 
unavailable to testify at a hearing, and that witness has testified in 
a deposition to which all parties in a proceeding had notice and an 
opportunity to participate, a party may offer as evidence all or any 
part of the transcript of the deposition, including deposition 
exhibits, if any.
    (2) Such deposition transcript is admissible to the same extent 
that testimony would have been admissible had that person testified at 
the hearing, provided that if a witness refused to answer proper 
questions during the depositions, the ALJ may, on that basis, limit the 
admissibility of the deposition in any manner that justice requires.
    (3) Only those portions of a deposition received in evidence at the 
hearing constitute a part of the record.


Sec.  19.37  Post-hearing filings.

    (a) Proposed findings and conclusions and supporting briefs--(1) 
Using the same method of service for each party, the ALJ will serve 
notice upon each party that the certified transcript, together with all 
hearing exhibits and exhibits introduced but not admitted into evidence 
at the hearing, has been filed. Any party may file with the ALJ 
proposed findings of fact, proposed conclusions of law, and a proposed 
order within 30 days following service of this notice by the ALJ or 
within such longer period as may be ordered by the ALJ.
    (2) Proposed findings and conclusions must be supported by citation 
to any relevant authorities and by page references to any relevant 
portions of the record. A post-hearing brief may be filed in support of 
proposed findings and conclusions, either as part of the same document 
or in a separate document. Any party who fails to file timely with the 
ALJ any proposed finding or conclusion is deemed to have waived the 
right to raise in any subsequent filing or submission any issue not 
addressed in such party's proposed finding or conclusion.
    (b) Reply briefs. Reply briefs may be filed within 15 days after 
the date on which the parties' proposed findings, conclusions, and 
order are due. Reply briefs must be strictly limited to responding to 
new matters, issues, or arguments raised in another party's papers. A 
party who has not filed proposed findings of fact and conclusions of 
law or a post-hearing brief may not file a reply brief.
    (c) Simultaneous filing required. The ALJ will not order the filing 
by any party of any brief or reply brief in advance of the other 
party's filing of its brief.


Sec.  19.38  Recommended decision and filing of record.

    (a) Filing of recommended decision and record. Within 45 days after 
expiration of the time allowed for filing reply briefs under Sec.  
19.37(b), the ALJ will file with and certify to the Comptroller, for 
decision, the record of the proceeding. The record must include the 
ALJ's recommended decision, recommended findings of fact, recommended 
conclusions of law, and proposed order; all prehearing and hearing 
transcripts, exhibits, and rulings; and the motions, briefs, memoranda, 
and other supporting papers filed in connection with the hearing. The 
ALJ will serve upon each party the recommended decision, findings, 
conclusions, and proposed order.
    (b) Filing of index. At the same time the ALJ files with and 
certifies to the Comptroller for final determination the record of the 
proceeding, the ALJ will furnish to the Comptroller a certified index 
of the entire record of the proceeding. The certified index must 
include, at a minimum, an entry for each paper, document, or motion 
filed with the ALJ in the proceeding, the date of the filing, and the 
identity of the filer. The certified index must also include an exhibit 
index containing, at a minimum, an entry consisting of exhibit number 
and title or description for: each exhibit introduced and admitted into 
evidence at the hearing; each exhibit introduced but not admitted into 
evidence at the hearing; each exhibit introduced and admitted into 
evidence after the completion of the hearing; and each exhibit 
introduced but not admitted into evidence after the completion of the 
hearing.


Sec.  19.39  Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  19.38, a party may file with the Comptroller written exceptions 
to the ALJ's recommended decision, findings, conclusions, or proposed 
order, to the admission or exclusion of evidence, or to the failure of 
the ALJ to make a ruling proposed by a party. A supporting brief may be 
filed at the time the exceptions are filed, either as part of the same 
document or in a separate document.

[[Page 89854]]

    (b) Effect of failure to file or raise exceptions--(1) Failure of a 
party to file exceptions to those matters specified in paragraph (a) of 
this section within the time prescribed is deemed a waiver of objection 
thereto.
    (2) No exception need be considered by the Comptroller if the party 
taking exception had an opportunity to raise the same objection, issue, 
or argument before the ALJ and failed to do so.
    (c) Contents.--(1) All exceptions and briefs in support of such 
exceptions must be confined to the particular matters in, or omissions 
from, the ALJ's recommendations to which that party takes exception.
    (2) All exceptions and briefs in support of exceptions must set 
forth page or paragraph references to the specific parts of the ALJ's 
recommendations to which exception is taken, the page or paragraph 
references to those portions of the record relied upon to support each 
exception, and the legal authority relied upon to support each 
exception.


Sec.  19.40  Review by the Comptroller.

    (a) Notice of submission to the Comptroller. When the Comptroller 
determines that the record in the proceeding is complete, the 
Comptroller will serve notice upon the parties that the proceeding has 
been submitted to the Comptroller for final decision.
    (b) Oral argument before the Comptroller. Upon the initiative of 
the Comptroller or on the written request of any party filed with the 
Comptroller within the time for filing exceptions, the Comptroller may 
order and hear oral argument on the recommended findings, conclusions, 
decision, and order of the ALJ. A written request by a party must show 
good cause for oral argument and state reasons why arguments cannot be 
presented adequately in writing. A denial of a request for oral 
argument may be set forth in the Comptroller's final decision. Oral 
argument before the Comptroller must be on the record.
    (c) Comptroller's final decision--(1) Decisional employees may 
advise and assist the Comptroller in the consideration and disposition 
of the case. The final decision of the Comptroller will be based upon 
review of the entire record of the proceeding, except that the 
Comptroller may limit the issues to be reviewed to those findings and 
conclusions to which opposing arguments or exceptions have been filed 
by the parties.
    (2) The Comptroller will render a final decision within 90 days 
after notification of the parties that the case has been submitted for 
final decision, or 90 days after oral argument, whichever is later, 
unless the Comptroller orders that the action or any aspect thereof be 
remanded to the ALJ for further proceedings. Copies of the final 
decision and order of the Comptroller will be served upon each party to 
the proceeding, upon other persons required by statute, and, if 
directed by the Comptroller or required by statute, upon any 
appropriate State or Federal supervisory authority.


Sec.  19.41  Stays pending judicial review.

    The commencement of proceedings for judicial review of a final 
decision and order of the Comptroller may not, unless specifically 
ordered by the Comptroller or a reviewing court, operate as a stay of 
any order issued by the Comptroller. The Comptroller may, in its 
discretion, and on such terms as the Comptroller finds just, stay the 
effectiveness of all or any part of an order pending a final decision 
on a petition for review of that order.

Subpart B--Procedural Rules for OCC Adjudications


Sec.  19.100  Filing documents.

    All materials required to be filed with or referred to the 
Comptroller or the ALJ in any proceeding under this part must be filed 
with the OCC Hearing Clerk in a manner prescribed by Sec.  19.10(b) and 
(c). Filings to be made with the Hearing Clerk include the notice and 
answer; motions and responses to motions; briefs; the record filed by 
the ALJ after the issuance of a recommended decision; the recommended 
decision filed by the ALJ following a motion for summary disposition; 
referrals by the ALJ of motions for interlocutory review; exceptions 
and requests for oral argument; any other papers required to be filed 
with the Comptroller or the ALJ under this part; and any attachments or 
exhibits to such documents.


Sec.  19.101  Delegation to OFIA.

    Unless otherwise ordered by the Comptroller, an ALJ assigned to 
OFIA conducts administrative adjudications subject to subpart A of this 
part.


Sec.  19.102  Civil money penalties.

    A respondent must pay civil money penalties assessed pursuant to 
subpart A of this part within 60 days after the issuance of the notice 
of assessment unless the OCC requires a different time for payment. A 
respondent that has made a timely request for a hearing to challenge 
the assessment of the penalty is not required to pay the penalty until 
the OCC has issued a final order of assessment. In these instances, the 
respondent must pay the penalty within 60 days of service of the order 
unless the OCC requires a different time for payment.

Subpart C--Removals, Suspensions, and Prohibitions of an 
Institution-Affiliated Party When a Crime Is Charged or a 
Conviction Is Obtained


Sec.  19.110  Scope and definitions.

    (a) Scope. This subpart applies to informal hearings afforded to 
any institution-affiliated party who has been suspended or removed from 
office or prohibited from further participation in the affairs of any 
depository institution pursuant to section 8(g) of the FDIA (12 U.S.C. 
1818(g)) by a notice or order issued by the Comptroller.
    (b) Definitions. As used in this subpart--
    (1) The term petitioner means an individual who has filed a 
petition for an informal hearing under this subpart.
    (2) The term depository institution means any national bank, 
Federal savings association, or Federal branch or agency of a foreign 
bank.
    (3) The term OCC Supervisory Office means the Senior Deputy 
Comptroller or Deputy Comptroller of the OCC department or office 
responsible for supervision of the depository institution or, in the 
case of an individual no longer affiliated with a particular depository 
institution, the Deputy Comptroller for Special Supervision.


Sec.  19.111  Suspension, removal, or prohibition of institution-
affiliated party.

    (a) Issuance of notice or order. The Comptroller may serve a notice 
of suspension or prohibition or order of removal or prohibition 
pursuant to section 8(g) of the FDIA (12 U.S.C. 1818(g)) on an 
institution-affiliated party. The Comptroller will serve a copy of this 
notice or order on any depository institution that the subject of the 
notice or order is affiliated with at the time the OCC issues the 
notice or order. After service of the notice or order, the institution-
affiliated party must immediately cease service to, or participation in 
the affairs of, that depository institution and, if so determined by 
the OCC, any other depository institution. The notice or order will 
indicate the basis for suspension, removal, or prohibition and will 
inform the institution-affiliated party of the right to request in 
writing, within 30 days from the date that the institution-affiliated 
party was served, an opportunity to show at an informal hearing that 
continued service to or participation in the conduct of the affairs of 
any depository institution has not posed, does not pose, or is not 
likely to pose a threat to the interests of the

[[Page 89855]]

depositors of, or has not threatened, does not threaten, or is not 
likely to threaten to impair public confidence in, any relevant 
depository institution. The Comptroller will serve the notice or order 
upon the institution-affiliated party and the related institution in 
the manner set forth in Sec.  19.11(c).
    (b) Request for hearing--(1) Submission. Unless instructed 
otherwise in writing by the Comptroller, an institution-affiliated 
party must send the written request for an informal hearing referenced 
in paragraph (a) of this section to the OCC Supervisory Office by 
certified mail, a same day courier service, an overnight delivery 
service, or by personal service with a signed receipt.
    (2) Content of request for a hearing. The request filed under this 
section must state specifically the relief desired and the grounds on 
which that relief is based and must admit, deny, or state that the 
institution-affiliated party lacks sufficient information to admit or 
deny each allegation in the notice or order. A statement of lack of 
information has the effect of a denial. Denials must fairly meet the 
substance of each allegation denied; general denials are not permitted. 
When the institution-affiliated party denies part of an allegation, 
that part must be denied and the remainder specifically admitted. Any 
allegation in the notice or order which is not denied is deemed 
admitted for purposes of the proceeding. The request must state with 
particularity how the institution-affiliated party intends to show that 
its continued service to or participation in the affairs of the 
institution would not pose a threat to the interests of the 
institution's depositors or impair public confidence in any 
institution.
    (c) Default. If the institution-affiliated party fails to timely 
file a petition for a hearing pursuant to paragraph (b) of this 
section, or fails to appear at a hearing, either in person or by 
counsel, or fails to submit a written argument where oral argument has 
been waived pursuant to Sec.  19.112(c), the notice will remain in 
effect until the information, indictment, or complaint is finally 
disposed of and the order will remain in effect until terminated by the 
OCC.


Sec.  19.112  Informal hearing.

    (a) Issuance of hearing order. After receipt of a request for 
hearing, the OCC Supervisory Office must notify the petitioner 
requesting the hearing and OCC Enforcement of the date, time, and place 
fixed for the hearing. The OCC will hold the hearing no later than 30 
days from the date when the OCC receives the request for a hearing, 
unless the time is extended in response to a written request of the 
petitioner. The OCC Supervisory Office may extend the hearing date only 
for a specific period of time and must take appropriate action to 
ensure that the hearing is not unduly delayed.
    (b) Appointment of presiding officer. The OCC Supervisory Office 
must appoint one or more OCC employees as the presiding officer to 
conduct the hearing. The presiding officer(s) may not have been 
involved in a prosecutorial or investigative role in the proceeding, a 
factually related proceeding, or the underlying enforcement action.
    (c) Waiver of oral hearing--(1) Petitioner. When the petitioner 
requests a hearing, the petitioner may elect to have the matter 
determined by the presiding officer solely on the basis of written 
submissions by serving on the OCC Supervisory Office and all parties a 
signed document waiving the statutory right to appear and make oral 
argument. The petitioner must present the written submissions to the 
presiding officer and serve the other parties not later than ten days 
prior to the date fixed for the hearing or within a shorter time period 
as the presiding officer may permit.
    (2) OCC. The OCC may respond to the petitioner's submissions by 
presenting the presiding officer with a written response and by serving 
the other parties in the manner prescribed by Sec.  19.11(c) not later 
than the date fixed for the hearing or within such other time period as 
the presiding officer may require.
    (d) Hearing procedures--(1) Conduct of hearing. Hearings under this 
subpart are not subject to the provisions of subpart A of this part or 
the adjudicative provisions of the Administrative Procedure Act (5 
U.S.C. 554-557).
    (2) Powers of the presiding officer. The presiding officer must 
determine all procedural issues that are governed by this subpart. The 
presiding officer also may permit witnesses, limit the number of 
witnesses, and impose time limitations as they deem reasonable. The 
informal hearing will not be governed by formal rules of evidence, 
including the Federal Rules of Evidence. The presiding officer must 
consider all oral presentations, when permitted, and all documents the 
presiding officer deems to be relevant and material to the proceeding 
and not unduly repetitious. The presiding officer may ask questions of 
any person participating in the hearing and may make any rulings 
reasonably necessary to facilitate the effective and efficient 
operation of the hearing.
    (3) Presentation. (i) The OCC and the petitioner may present 
relevant written materials and oral argument at the hearing. The 
petitioner may appear at the hearing personally or through counsel. 
Except as permitted in paragraph (c) of this section, each party, 
including the OCC, must file a copy of any affidavit, memorandum, or 
other written material to be presented at the hearing with the 
presiding officer and must serve the other parties not later than ten 
days prior to the hearing or within such shorter time period as 
permitted by the presiding officer.
    (ii) If the petitioner or the OCC desires to present oral testimony 
or witnesses at the hearing, they must file a written request with the 
presiding officer not later than ten days prior to the hearing, or 
within a shorter time period as required by the presiding officer. The 
written request must include the names of proposed witnesses, along 
with the general nature of the expected testimony, and the reasons why 
oral testimony is necessary. The presiding officer generally will not 
admit oral testimony or witnesses unless a specific and compelling need 
is demonstrated. Witnesses, if admitted, must be sworn. By stipulation 
of the parties or by order of the presiding officer, a court reporter 
or other person authorized to administer an oath may administer the 
oath remotely without being in the physical presence of the witness.
    (iii) In deciding on any suspension or prohibition based on an 
indictment, information, or complaint, the presiding officer may not 
consider the ultimate question of the guilt or innocence of the 
individual with respect to the criminal charges that are outstanding. 
In deciding on any removal or prohibition with respect to a conviction 
or pre-trial diversion program, the presiding officer may not consider 
challenges to or efforts to impeach the validity of the conviction or 
the agreement to enter a pre-trial diversion program or other similar 
program. The presiding officer may consider facts in either situation, 
however, that show the nature of the events on which the criminal 
charges, conviction, or agreement to enter a pre-trial diversion 
program or other similar program was based.
    (4) Electronic presentation. Based on the circumstances of each 
hearing, the presiding officer may direct the use of, or any party may 
elect to use, an electronic presentation during the hearing. If the 
presiding officer requires an electronic presentation during the 
hearing, each party will be responsible for their own presentation and 
related costs unless the parties agree to another

[[Page 89856]]

manner by which to allocate presentation responsibilities and costs.
    (5) Record. A transcript of the proceedings may be taken if the 
petitioner requests a transcript and agrees to pay all expenses or if 
the presiding officer determines that the nature of the case warrants a 
transcript. The presiding officer may order the record to be kept open 
for a reasonable period following the hearing, not to exceed five 
business days, to permit the petitioner or the OCC to submit additional 
documents for the record. Thereafter, no further submissions may be 
accepted except for good cause shown.


Sec.  19.113  Recommended and final decisions.

    (a) Issuance of recommended decision. The presiding officer must 
issue a recommended decision to the Comptroller within 20 days of the 
conclusion of the hearing or, when the petitioner has waived an oral 
hearing, within 20 days of the date fixed for the hearing. The 
presiding officer must serve promptly a copy of the recommended 
decision on the parties to the proceeding. The decision must include a 
summary of the facts and arguments of the parties.
    (b) Comments. Each party may, within ten days of being served with 
the presiding officer's recommended decision, submit to the Comptroller 
comments on the recommended decision.
    (c) Issuance of final decision. Within 60 days of the conclusion of 
the hearing or, if the petitioner has waived an oral hearing, within 60 
days from the date fixed for the hearing, the Comptroller will notify 
the petitioner by registered mail, or electronic mail or other 
electronic means if the petitioner consents, whether the suspension or 
removal from office or prohibition from participation in any manner in 
the affairs of any depository institution will be affirmed, terminated, 
or modified. The Comptroller's decision must include a statement of 
reasons supporting the decision. The Comptroller's decision is a final 
and unappealable order.
    (d) Other actions. A finding of not guilty or other disposition of 
the charge or charges on which a notice of suspension was based does 
not preclude the Comptroller from thereafter instituting removal 
proceedings pursuant to section 8(e) of the FDIA (12 U.S.C. 1818(e)) 
and subpart A of this part.
    (e) Expiration of order. A removal or prohibition by order remains 
in effect until terminated by the Comptroller. A suspension or 
prohibition by notice remains in effect until the criminal charge is 
disposed of or until terminated by the Comptroller.
    (f) Petition for reconsideration. A suspended or removed individual 
may petition the Comptroller to reconsider the decision any time after 
the expiration of a 12-month period from the date of the decision, but 
no petition for reconsideration may be made within 12 months of a 
previous petition. The petition must state specifically the relief 
sought and the grounds therefor, and may be accompanied by a supporting 
memorandum and any other documentation the petitioner wishes to have 
considered. The Comptroller is not required to grant a hearing on the 
petition for reconsideration.

Subpart D--Actions Under the Federal Securities Laws


Sec.  19.120  Exemption hearings under section 12(h) of the Securities 
Exchange Act of 1934.

    (a) Scope. The rules in this section apply to informal hearings 
that may be held by the Comptroller to determine whether, pursuant to 
authority in sections 12(h) and (i) of the Securities Exchange Act of 
1934 (Exchange Act) (15 U.S.C. 78l(h) and (i)), to exempt in whole or 
in part an issuer or a class of issuers from the provisions of section 
12(g), or from section 13 or 14 of the Exchange Act (15 U.S.C. 78l(g), 
78m or 78n), or whether to exempt from section 16 of the Exchange Act 
(15 U.S.C. 78p) any officer, director, or beneficial owner of 
securities of an issuer. The only issuers covered by this section are 
national banks and Federal savings associations whose securities are 
registered, or which may be subject to registration, pursuant to 
section 12(g) of the Exchange Act (15 U.S.C. 78l(g)). The Comptroller 
may deny an application for exemption without a hearing.
    (b) Application for exemption. An issuer or an individual (officer, 
director, or shareholder) may submit a written application for an 
exemption order to Bank Advisory, Office of the Comptroller of the 
Currency, Washington, DC 20219. The application must specify the type 
of exemption sought and the reasons for the exemption, including an 
explanation of why an exemption would not be inconsistent with the 
public interest or the protection of investors. Bank Advisory will 
inform the applicant in writing whether a hearing will be held to 
consider the matter.
    (c) Newspaper notice. Upon being informed that an application will 
be considered at a hearing, the applicant must publish a notice one 
time in a newspaper of general circulation in the community where the 
issuer's main office is located. The notice must state: The name and 
title of any individual applicants; the type of exemption sought; the 
fact that a hearing will be held; and a statement that interested 
persons may submit to Bank Advisory, Office of the Comptroller of the 
Currency, Washington, DC 20219 within 30 days from the date of the 
newspaper notice, written comments concerning the application and a 
written request for an opportunity to be heard. The applicant must 
promptly provide a copy of the notice to Bank Advisory and to the 
national bank's or Federal savings association's shareholders in the 
same manner as is customary for shareholder communications.
    (d) Informal hearing--(1) Conduct of proceeding. The adjudicative 
provisions of the Administrative Procedure Act, formal rules of 
evidence, and subpart A of this part do not apply to hearings conducted 
under this section, except as provided in Sec.  19.100.
    (2) Notice of hearing. Following the comment period, the 
Comptroller will send a notice that fixes a date, time, and place for 
hearing to each applicant and to any person who has requested an 
opportunity to be heard.
    (3) Presiding officer. The Comptroller will designate a presiding 
officer to conduct the hearing. The presiding officer must determine 
all procedural questions not governed by this section and may limit the 
number of witnesses and impose time and presentation limitations as are 
deemed reasonable. At the conclusion of the informal hearing, the 
presiding officer must issue a recommended decision to the Comptroller 
as to whether the exemption should be issued. The decision must include 
a summary of the facts and arguments of the parties.
    (4) Attendance. Each applicant and any person who has requested an 
opportunity to be heard may attend the hearing with or without counsel. 
The hearing will be open to the public. In addition, each applicant and 
any other hearing participant may introduce oral testimony through such 
witnesses as the presiding officer may permit.
    (5) Order of presentation. (i) Each applicant may present an 
opening statement of a length decided by the presiding officer. Each of 
the hearing participants, or one among them selected with the approval 
of the presiding officer, may then present an opening statement. The 
opening statement should summarize concisely what each applicant and 
participant intends to show.

[[Page 89857]]

    (ii) Each applicant will have an opportunity to make an oral 
presentation of facts and materials or submit written materials for the 
record. One or more of the hearing participants may make an oral 
presentation or a written submission.
    (iii) After the above presentations, each applicant, followed by 
one or more of the hearing participants, may make concise summary 
statements reviewing their position.
    (6) Witnesses. The obtaining and use of witnesses is the 
responsibility of the parties afforded the hearing. All witnesses must 
be present on their own volition, but any person appearing as a witness 
may be questioned by each applicant, any hearing participant, and the 
presiding officer. Witnesses must be sworn unless otherwise directed by 
the presiding officer. By stipulation of the parties or by order of the 
presiding officer, a court reporter or other person authorized to 
administer an oath may administer the oath remotely without being in 
the physical presence of the witness.
    (7) Evidence. The presiding officer may exclude data or materials 
deemed to be improper or irrelevant. Formal rules of evidence do not 
apply. Documentary material must be of a size consistent with ease of 
handling and filing. The presiding officer may determine the number of 
copies that must be furnished for purposes of the hearing.
    (8) Electronic presentation. Based on the circumstances of each 
hearing, the presiding officer may direct the use of, or any party may 
elect to use, an electronic presentation during the hearing. If the 
presiding officer requires an electronic presentation during the 
hearing, each party will be responsible for their own presentation and 
related costs unless the parties agree to another manner in which to 
allocate presentation responsibilities and costs.
    (9) Transcript. The OCC will arrange a transcript of each 
proceeding with all expenses, including the furnishing of a copy to the 
presiding officer by electronic means or otherwise, paid by the 
applicant or applicants.
    (e) Decision of the Comptroller. Following the conclusion of the 
hearing and the submission of the record and the presiding officer's 
recommended decision to the Comptroller for decision, the Comptroller 
will notify each applicant and all persons who have so requested in 
writing of the final disposition of the application. Exemptions granted 
must be in the form of an order that specifies the type of exemption 
granted and its terms and conditions.


Sec.  19.121  Disciplinary proceedings.

    (a) Scope--(1) In general. Except as provided in this section, 
subpart A of this part applies to proceedings by the Comptroller to 
determine whether, pursuant to authority contained in sections 
15B(c)(5), 15C(c)(2)(A), 17A(c)(3), and 17A(c)(4)(C) of the Exchange 
Act (15 U.S.C. 78o-4(c)(5), 78o-5(c)(2)(A), 78q-1(c)(3)(A), and 78q-
1(c)(4)(C)), to take disciplinary action against the following:
    (i) A bank that is a municipal securities dealer, any person 
associated with a bank that is a municipal securities dealer, or any 
person seeking to become associated with a bank that is a municipal 
securities dealer;
    (ii) A bank that is a government securities broker or government 
securities dealer, any person associated with a bank that is a 
government securities broker or government securities dealer, or any 
person seeking to become associated with a government securities broker 
or government securities dealer; or
    (iii) A bank that is a transfer agent, any person associated with a 
bank that is a transfer agent, or any person seeking to become 
associated with a bank that is a transfer agent.
    (2) Other actions. In addition to the issuance of disciplinary 
orders after opportunity for hearing, the Comptroller may issue and 
serve any notices and temporary or permanent cease-and-desist orders 
and take any actions that are authorized by section 8 of the FDIA (12 
U.S.C. 1818); sections 15B(c)(5), 15C(c)(2)(B), and 17A(d)(2) of the 
Exchange Act (15 U.S.C. 78o-4(c)(5), 78o-5(c)(2)(B), and 78q-1(d)(2)); 
and other sections of this part against the following:
    (i) The parties listed in paragraph (a)(1) of this section; and
    (ii) A bank that is a clearing agency.
    (3) Definitions. As used in this section:
    (i) The term bank means a national bank or Federal savings 
association, and, when referring to a government securities broker or 
government securities dealer, a Federal branch or agency of a foreign 
bank;
    (ii) The terms transfer agent, municipal securities dealer, 
government securities broker, and government securities dealer have the 
same meaning as the terms in sections 3(a)(25), 3(a)(30), 3(a)(43), and 
3(a)(44) of the Exchange Act (15 U.S.C. 78c(a)(25), 78c(a)(30), 
78c(a)(43), and 78c(a)(44)), respectively;
    (iii) The terms person associated with a bank that is a municipal 
securities dealer and person associated with a municipal securities 
dealer have the same meaning as person associated with a municipal 
securities dealer in section 3(a)(32) of the Exchange Act (15 U.S.C. 
78c(a)(32));
    (iv) The terms person associated with a bank that is a government 
securities broker or government securities dealer and person associated 
with a government securities broker or government securities dealer 
have the same meaning as person associated with a government securities 
broker or government securities dealer in section 3(a)(45) of the 
Exchange Act (15 U.S.C. 78c(a)(45)); and
    (v) The terms person associated with a bank that is a transfer 
agent and person associated with a transfer agent have the same meaning 
as person associated with a transfer agent in section 3(a)(49) of the 
Exchange Act (15 U.S.C. 78c(a)(49)).
    (4) Preservation of authority. Nothing in this section impairs the 
powers conferred on the Comptroller by other provisions of law.
    (b) Notice of charges and answer--(1) In general. Proceedings are 
commenced when the Comptroller serves a notice of charges on a bank or 
associated person. The notice must indicate the type of disciplinary 
action being contemplated and the grounds therefor and fix a date, 
time, and place for hearing. The hearing must be set for a date at 
least 30 days after service of the notice. A respondent served with a 
notice of charges may file an answer as prescribed in Sec.  19.19. Any 
respondent who fails to appear at a hearing personally or by a duly 
authorized representative is deemed to have consented to the issuance 
of a disciplinary order.
    (2) Public basis of proceedings; private hearings. All proceedings 
under this section must be commenced, and the notice of charges must be 
filed, on a public basis unless otherwise ordered by the Comptroller. 
Pursuant to Sec.  19.33(a), a request for a private hearing may be 
filed within 20 days of service of the notice.
    (c) Disciplinary orders--(1) Service of order; content. In the 
event of consent, or if on the record filed by the ALJ, the Comptroller 
finds that any act or omission or violation specified in the notice of 
charges has been established, the Comptroller may serve on the bank or 
persons concerned a disciplinary order, as provided in the Exchange 
Act. The order may:
    (i) Censure; limit the activities, functions, or operations of; or 
suspend or revoke the registration of a bank that is a municipal 
securities dealer;
    (ii) Censure, suspend, or bar any person associated with a 
municipal securities dealer or seeking to become a

[[Page 89858]]

person associated with a municipal securities dealer;
    (iii) Censure; limit the activities, functions, or operations of; 
or suspend or bar a bank that is a government securities broker or 
government securities dealer;
    (iv) Censure; limit the activities, functions, or operations of; or 
suspend or bar any person associated with or seeking to become a person 
associated with a government securities broker or government securities 
dealer;
    (v) Deny registration to; limit the activities, functions, or 
operations of; or suspend or revoke the registration of a bank that is 
a transfer agent; or
    (vi) Censure, limit the activities or functions of, or suspend or 
bar any person associated with a transfer agent or seeking to become a 
person associated with a transfer agent.
    (2) Effective date of order. A disciplinary order is effective when 
served on the respondent or respondents involved and remains effective 
and enforceable until it is stayed, modified, terminated, or set aside 
by action of the Comptroller or a reviewing court.
    (d) Applications for stay or review of disciplinary actions imposed 
by registered clearing agencies--(1) Stays. The rules adopted by the 
Securities and Exchange Commission (SEC) pursuant to section 19 of the 
Exchange Act (15 U.S.C. 78s) regarding applications by persons for whom 
the SEC is the appropriate regulatory agency for stays of disciplinary 
sanctions or summary suspensions imposed by registered clearing 
agencies (17 CFR 240.19d-2) apply to applications by banks. References 
to the ``Commission'' are deemed to refer to the ``OCC.''
    (2) Reviews. The regulations adopted by the SEC pursuant to section 
19 of the Exchange Act (15 U.S.C. 78s) regarding applications by 
persons for whom the SEC is the appropriate regulatory agency for 
reviews of final disciplinary sanctions, denials of participation, or 
prohibitions or limitations of access to services imposed by registered 
clearing agencies (17 CFR 240.19d-3(a) through (f)) apply to 
applications by banks. References to the ``Commission'' are deemed to 
refer to the ``OCC.''


Sec.  19.122  Civil money penalty authority under Federal securities 
laws.

    (a) Scope. Except as provided in this section, subpart A of this 
part applies to proceedings by the Comptroller to determine whether, 
pursuant to authority contained in section 21B of the Exchange Act (15 
U.S.C. 78u-2), in proceedings commenced pursuant to sections 15B, 15C, 
and 17A of the Exchange Act (15 U.S.C. 78o-4, 78o-5, or 78q-1) for 
which the OCC is the appropriate regulatory agency under section 
3(a)(34) of the Exchange Act (15 U.S.C. 78c(a)(34)), the Comptroller 
may impose a civil money penalty against the following:
    (1) A bank that is a municipal securities dealer, any person 
associated with a bank that is a municipal securities dealer, or any 
person seeking to become associated with a bank that is a municipal 
securities dealer;
    (2) A bank that is a government securities broker or government 
securities dealer, any person associated with a bank that is a 
government securities broker or government securities dealer, or any 
person seeking to become associated with a government securities broker 
or government securities dealer; or
    (3) A bank that is a transfer agent, any person associated with a 
bank that is a transfer agent, or any person seeking to become 
associated with a bank that is a transfer agent.
    (b) Definitions. As used in this section:
    (1) The term bank means a national bank or Federal savings 
association, and, when referring to a government securities broker or 
government securities dealer, a Federal branch or agency of a foreign 
bank;
    (2) The terms transfer agent, municipal securities dealer, 
government securities broker, and government securities dealer have the 
same meaning as such terms in sections 3(a)(25), 3(a)(30), 3(a)(43), 
and 3(a)(44) of the Exchange Act (15 U.S.C. 78c(a)(25), 78c(a)(30), 
78c(a)(43), and 78c(a)(44)), respectively;
    (3) The term person associated with a bank that is a municipal 
securities dealer has the same meaning as person associated with a 
municipal securities dealer in section 3(a)(32) of the Exchange Act (15 
U.S.C. 78c(a)(32));
    (4) The term person associated with a bank that is a government 
securities broker or government securities dealer has the same meaning 
as person associated with a government securities broker or government 
securities dealer in section 3(a)(45) of the Exchange Act (15 U.S.C. 
78c(a)(45)); and
    (5) The term person associated with a bank that is a transfer agent 
has the same meaning as person associated with a transfer agent in 
section 3(a)(49) of the Exchange Act (15 U.S.C. 78c(a)(49)).
    (c) Public basis of proceedings; private hearings. All proceedings 
under this section must be commenced, and the notice of assessment must 
be filed, on a public basis, unless otherwise ordered by the 
Comptroller. Pursuant to Sec.  19.33(a), any request for a private 
hearing may be filed within 20 days of service of the notice.


Sec.  19.123  Cease-and-desist authority.

    (a) Scope. Except as provided in this section, subpart A of this 
part applies to proceedings by the Comptroller to determine whether, 
pursuant to authority contained in sections 12(i) and 21C of the 
Exchange Act (15 U.S.C. 78l(i) and 78u-3), the Comptroller may initiate 
cease-and-desist proceedings against a national bank or Federal savings 
association for violations of sections 10A(m), 12, 13, 14(a), 14(c), 
14(d), 14(f), and 16 of the Exchange Act (15 U.S.C. 78j-1(m), 78l, 78m, 
78n(a), 78n(c), 78n(d), 78n(f), and 78p); sections 302, 303, 304, 306, 
401(b), 404, 406, and 407 of the Sarbanes-Oxley Act of 2002 as amended 
(15 U.S.C. 7241, 7242, 7243, 7244, 7261, 7262, 7264, and 7265); or 
regulations or rules issued thereunder.
    (b) Public basis of proceedings; private hearings. All proceedings 
under this section must be commenced, and the notice of charges must be 
filed, on a public basis, unless otherwise ordered by the Comptroller. 
Pursuant to Sec.  19.33(a), any request for a private hearing may be 
filed within 20 days of service of the notice.

Subparts E through G--Reserved

Subpart H--Change in Bank Control


Sec.  19.160  Scope.

    (a) Scope. This subpart governs the procedures for a hearing 
requested by a person who has filed a notice that has been disapproved 
by the OCC for a change in control of:
    (1) An insured national bank or Federal savings association 
pursuant to section 7(j) of the FDIA (12 U.S.C. 1817(j)) and 12 CFR 
5.50; or
    (2) An uninsured national bank pursuant to 12 CFR 5.50.
    (b) Applicability of subpart A of this part. Unless otherwise 
provided in this subpart, the rules in subpart A set forth the 
procedures applicable to requests for OCC hearings under this subpart.


Sec.  19.161  Hearing process.

    (a) Hearing request. Pursuant to 12 CFR 5.50(f)(6), following 
receipt of a notice of disapproval of a proposed acquisition of control 
of a national bank or Federal savings association, a filer may request 
a hearing by the OCC on the proposed acquisition. A hearing request 
must:
    (1) Be in writing; and
    (2) Be filed with the Hearing Clerk of the OCC within ten days 
after service on the filer of the notice of disapproval. If

[[Page 89859]]

a filer fails to request a hearing with a timely written request, the 
notice of disapproval constitutes a final and unappealable order.
    (b) Hearing order. Following receipt of a hearing request, the 
Comptroller will issue, within 20 days, an order that sets forth:
    (1) The legal authority for the proceeding and for the OCC's 
jurisdiction over the proceeding;
    (2) The matters of fact or law upon which the disapproval is based; 
and
    (3) The requirement for filing an answer to the hearing order with 
OFIA within 20 days after service of the hearing order.
    (c) Answer. An answer to a hearing order must specifically deny 
those portions of the order that are disputed. Those portions of the 
order that the filer does not specifically deny are deemed admitted by 
the filer. Any hearing under this subpart is limited to those portions 
of the order that are specifically denied.
    (d) Effect of failure to answer. Failure of a filer to file an 
answer within 20 days after service of the hearing order constitutes a 
waiver of the filer's right to appear and contest the allegations in 
the hearing order. If a filer does not file a timely answer, 
Enforcement Counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the ALJ will file with the Comptroller a 
recommended decision containing the findings and the relief sought in 
the hearing order. Any final order issued by the Comptroller based upon 
a filer's failure to answer is deemed to be an order issued upon 
consent and is a final and unappealable order.

Subpart I--Discovery Depositions and Subpoenas


Sec.  19.170  Discovery depositions.

    (a) In general. In any proceeding instituted under or subject to 
the provisions of subpart A of this part, a party may take the 
deposition of a fact witness, an expert, or a hybrid fact-expert where 
there is need for the deposition. A fact witness is a person, including 
another party, who has direct knowledge of matters that are non-
privileged and of material relevance to the proceeding. A hybrid fact-
expert witness is a fact witness who will also provide relevant expert 
opinion testimony based on the witness' training and experience. The 
deposition of experts is limited to those experts who are expected to 
testify at the hearing.
    (1) Report. A party must produce an expert report for any 
testifying expert or hybrid fact-expert witness before the witness' 
deposition. Unless otherwise provided by the ALJ, the party must 
produce this report at least 20 days prior to any deposition of the 
expert or hybrid fact-expert witness.
    (2) Limits on depositions. Respondents, collectively, are limited 
to a combined total of five depositions from fact witnesses and hybrid 
fact-expert witnesses. Enforcement Counsel are limited to a combined 
total of five depositions from fact witnesses and hybrid fact-expert 
witnesses. A party is entitled to take a deposition of each expert 
witness designated by an opposing party.
    (b) Notice. A party desiring to take a deposition must give 
reasonable notice in writing to the deponent and to every other party 
to the proceeding. The notice must state the time, manner, and place 
for taking the deposition, and the name and address of the person to be 
deposed.
    (1) Location. A deposition notice may require the witness to be 
deposed at any place within a State, territory, or possession of the 
United States or the District of Columbia in which that witness resides 
or has a regular place of employment, or such other convenient place as 
agreed by the noticing party and the witness.
    (2) Remote participation. The parties may stipulate, or the ALJ may 
order, that a deposition be taken by telephone or other remote means.
    (c) Time limits. A party may take depositions at any time after the 
commencement of the proceeding, but no later than 20 days before the 
scheduled hearing date, except with permission of the ALJ for good 
cause shown.
    (d) Conduct of the deposition. The witness must be duly sworn. By 
stipulation of the parties or by order of the ALJ, a court reporter or 
other person authorized to administer an oath may administer the oath 
remotely without being in the physical presence of the deponent. Each 
party will have the right to examine the witness with respect to all 
matters that are non-privileged and of material relevance to the 
proceeding and of which the witness has factual, direct, and personal 
knowledge. Objections to questions or exhibits must be in short form 
and must state the grounds for the objection. Failure to object to 
questions or exhibits is not a waiver except where the grounds for the 
objection might have been avoided if the objection had been timely 
presented.
    (e) Recording the testimony--(1) Generally. The party taking the 
deposition must have a certified court reporter record the witness' 
testimony:
    (i) By stenotype machine or electronic means, such as by sound or 
video recording device;
    (ii) Upon agreement of the parties, by any other method; or
    (iii) For good cause and with leave of the ALJ, by any other 
method.
    (2) Cost. The party taking the deposition must bear the cost of 
recording and transcribing the witness' testimony.
    (3) Transcript. Unless the parties agree that a transcription is 
not necessary, the court reporter must provide a transcript of the 
witness' testimony to the party taking the deposition and must make a 
copy of the transcript available to each party upon payment by that 
party of the cost of the copy.
    (f) Protective orders. At any time after notice of a deposition has 
been given, a party may file a motion for the issuance of a protective 
order. Such protective order may prohibit, terminate, or limit the 
scope or manner of the taking of a deposition. The ALJ may grant a 
protective order upon a showing of sufficient grounds, including that 
the deposition:
    (1) Is unreasonable, oppressive, excessive in scope, or unduly 
burdensome;
    (2) Involves privileged, irrelevant, or immaterial matters;
    (3) Involves unwarranted attempts to pry into a party's preparation 
for trial; or
    (4) Is being conducted in bad faith or in such manner as to 
unreasonably annoy, embarrass, or oppress the witness.
    (g) Expenses. Deposition witnesses, including expert witnesses, 
must be paid the same expenses in the same manner as are paid witnesses 
in the district courts of the United States in proceedings in which the 
United States is a party. Expenses in accordance with this paragraph 
(g) must be paid by the party seeking to take the deposition.


Sec.  19.171  Deposition subpoenas.

    (a) Issuance. At the request of a party, the ALJ may issue a 
subpoena requiring the attendance of a witness at a discovery 
deposition under Sec.  19.170. The attendance of a witness may be 
required from any place in any State, territory, or possession of the 
United States or the District of Columbia or as otherwise permitted by 
law.
    (b) Service--(1) Methods of service. The party requesting the 
subpoena must serve it on the person named therein, or on that person's 
counsel, by any of the methods identified in Sec.  19.11(d).
    (2) Proof of service. The party serving the subpoena must file 
proof of service

[[Page 89860]]

with the ALJ, unless the ALJ issues an order indicating the filing of 
proof of service is not required.
    (c) Motion to quash. A person named in a subpoena, or any party, 
may file a motion to quash or modify the subpoena. A statement of the 
reasons for the motion must accompany it and a copy of the motion must 
be served on the party that requested the subpoena. The motion must be 
made prior to the time for compliance specified in the subpoena and not 
more than ten days after the date of service of the subpoena, or if the 
subpoena is served within 15 days of the hearing, within five days 
after the date of service.
    (d) Enforcement of deposition subpoena. Enforcement of a deposition 
subpoena must be in accordance with the procedures of Sec.  19.27(d).

Subpart J--Formal Investigations


Sec.  19.180  Scope.

    This subpart and Sec.  19.8 apply to formal investigations 
initiated by order of the Comptroller and pertain to the exercise of 
powers specified in section 5240 of the Revised Statutes of the United 
States (12 U.S.C. 481); section 5(d)(1)(B) of the Home Owners' Loan Act 
(12 U.S.C. 1464(d)(1)(B)); sections 7(j)(15), 8(n), and 10(c) of the 
FDIA (12 U.S.C. 1817(j)(15), 1818(n), and 1820(c)); sections 4(b) and 
13(a) and (b) of the International Banking Act of 1978 (12 U.S.C. 
3102(b) and 3108(a) and (b)); and section 21 of the Exchange Act (15 
U.S.C. 78u). This subpart does not restrict or in any way affect the 
authority of the Comptroller to conduct examinations into the affairs 
or ownership of national banks, Federal savings associations, Federal 
branches and agencies, and their affiliates.


Sec.  19.181  Confidentiality of formal investigations.

    The entire record of any formal investigative proceeding, including 
the resolution or order of the Comptroller authorizing or terminating 
the proceeding; all subpoenas issued by the OCC during the 
investigation; and all information, documents, and transcripts obtained 
by the OCC in the course of a formal investigation, are confidential 
and may be disclosed only in accordance with the provisions of part 4 
of this chapter or pursuant to OCC discovery obligations under subpart 
A of this part.


Sec.  19.182  Order to conduct a formal investigation.

    A formal investigation begins with the issuance of an order signed 
by the Comptroller. The order must designate the person or persons 
empowered by the Comptroller to conduct the investigation. These 
persons are authorized, among other things, to administer oaths and 
affirmations, to take or cause to be taken testimony under oath, and to 
issue or modify subpoenas, including subpoenas duces tecum, as to any 
matter under investigation by the Comptroller. Upon application and for 
good cause shown, the Comptroller may limit, modify, withdraw, or 
terminate the order at any stage of the proceedings.


Sec.  19.183  Rights of witnesses.

    (a) Right to be shown order. Any person who is compelled or 
requested to furnish testimony, documentary evidence, or other 
information with respect to any matter under formal investigation must, 
on request, be shown the order initiating the investigation. These 
persons may not retain copies of the order without first receiving 
written approval of the OCC.
    (b) Right to counsel. Any person who, in a formal investigation, is 
compelled to appear and testify, or who appears and testifies by 
request or permission of the OCC, may be accompanied, represented, and 
advised by counsel. The right to be accompanied, represented, and 
advised by counsel means the right of a person testifying to have an 
attorney present at all times while testifying and to have the 
attorney:
    (1) Advise the person before, during, and after the conclusion of 
testimony;
    (2) Question the person, on the record, briefly at the conclusion 
of testimony for the purpose of clarifying any of the answers given; 
and
    (3) Make summary notes during the testimony solely for use in 
representing the person.
    (c) Exclusion from proceedings. Any person who has given or will 
give testimony and counsel representing the person may be excluded from 
the proceedings during the taking of testimony of any other person at 
the discretion of the OCC or the OCC's designated representatives. 
Neither attorney(s) for the institution(s) affiliated with the 
testifying person nor attorneys for any other interested persons have 
any right to be present during the testimony of any person not 
personally represented by such attorney.
    (d) Right to inspect testimony transcript. Any person who is 
compelled to give testimony is entitled to inspect any transcript that 
has been made of the testimony but may not obtain a copy if the OCC or 
the OCC's designated representatives conducting the proceedings 
determine that the contents should not be disclosed.


Sec.  19.184  Service of subpoena and payment of witness expenses.

    (a) Methods of service. Service of a subpoena may be made by any of 
the methods identified in Sec.  19.11(d).
    (b) Expenses. The fees and expenses specified in Sec.  19.14 apply 
to a witness who is subpoenaed to testify pursuant to this subpart.
    (c) Area of service. Subpoenas issued in connection with a formal 
investigation proceeding that require the attendance and testimony of 
witnesses or the production of documents, including electronically 
stored information, may be served on any person or entity within any 
State, territory, or possession of the United States or the District of 
Columbia, or as otherwise provided by law. Foreign nationals are 
subject to such subpoenas if service is made upon a duly authorized 
agent located in the United States or in accordance with international 
requirements for service of subpoenas.


Sec.  19.185  Dilatory, obstructionist, or insubordinate conduct.

    Any OCC designated representative conducting an investigative 
proceeding will report to the Comptroller any instances where any 
person has engaged in dilatory, obstructionist, or insubordinate 
conduct during the course of the proceeding or any other instance 
involving a violation of this part. The Comptroller may take such 
action as the circumstances warrant, including exclusion of the 
offending individual or individuals from participation in the 
proceedings.

Subpart K--Parties and Representational Practice Before the OCC; 
Standards of Conduct


Sec.  19.190  Scope.

    This subpart contains rules relating to parties and 
representational practice before the OCC. This subpart includes the 
imposition of sanctions by the ALJ, any other presiding officer 
appointed pursuant to subpart C of this part and Sec.  19.120, or the 
Comptroller against parties or their counsel in an adjudicatory 
proceeding under this part. This subpart also covers other disciplinary 
sanctions--censure, suspension, or debarment--against individuals who 
appear before the OCC in a representational capacity either in an 
adjudicatory proceeding under this part or in any other matters 
connected with presentations to the OCC relating to a client's rights, 
privileges, or liabilities. This representation includes, but is not 
limited to, the practice of attorneys and accountants. Employees

[[Page 89861]]

of the OCC are not subject to disciplinary proceedings under this 
subpart.


Sec.  19.191  Definitions.

    As used in Sec. Sec.  19.190 through 19.201, the following terms 
have the meaning given in this section unless the context otherwise 
requires:
    (a) Accountant means any individual who is duly qualified to 
practice as a certified public accountant or a public accountant in any 
state, possession, territory, or commonwealth of the United States or 
the District of Columbia.
    (b) Attorney means any individual who is a member in good standing 
of the bar of the highest court of any state, possession, territory, or 
commonwealth of the United States or the District of Columbia.
    (c) Practice before the OCC includes any matters connected with 
written or oral presentations to the OCC or any of its officers or 
employees relating to a client's rights, privileges, or liabilities 
under laws or regulations administered by the OCC. Such matters 
include, but are not limited to, representation of a client in an 
adjudicatory proceeding under this part; the preparation of any 
statement, opinion or other paper or document by an attorney, 
accountant, or other licensed professional that is filed with, or 
submitted to, the OCC, on behalf of another person in, or in connection 
with, any application, notification, report or document; the 
representation of a person at conferences, hearings and meetings; and 
the transaction of other business before the OCC on behalf of another 
person. The term practice before the OCC does not include work prepared 
for a national bank, Federal savings association, or Federal branch or 
agency of a foreign bank solely at its request for use in the ordinary 
course of its business.


Sec.  19.192  Sanctions relating to conduct in an adjudicatory 
proceeding.

    (a) In general. Appropriate sanctions may be imposed when any party 
or person representing a party in an adjudicatory proceeding under this 
part has failed to comply with an applicable statute, regulation, or 
order, and that failure to comply:
    (1) Constitutes contemptuous conduct;
    (2) Materially injures or prejudices another party in terms of 
substantive injury, incurring additional expenses including attorney's 
fees, prejudicial delay, or otherwise;
    (3) Is a clear and unexcused violation of an applicable statute, 
regulation, or order; or
    (4) Unduly delays the proceeding.
    (b) Sanctions. Sanctions which may be imposed include any one or 
more of the following:
    (1) Issuing an order against the party;
    (2) Rejecting or striking any testimony or documentary evidence 
offered, or other papers filed, by the party;
    (3) Precluding the party from contesting specific issues or 
findings;
    (4) Precluding the party from offering certain evidence or from 
challenging or contesting certain evidence offered by another party;
    (5) Precluding the party from making a late filing or conditioning 
a late filing on any terms that are just; and
    (6) Assessing reasonable expenses, including attorney's fees, 
incurred by any other party as a result of the improper action or 
failure to act.
    (c) Procedure for imposition of sanctions. (1) Upon the motion of 
any party, or on their own motion, the ALJ or other presiding officer 
may impose sanctions in accordance with this section. The ALJ or other 
presiding officer will submit to the Comptroller for final ruling any 
sanction entering a final order that determines the case on the merits.
    (2) No sanction authorized by this section, other than refusal to 
accept late filings, will be imposed without prior notice to all 
parties and an opportunity for any party against whom sanctions would 
be imposed to be heard. Such opportunity to be heard may be on such 
notice, and the response may be in such form as the ALJ or other 
presiding officer directs. The ALJ or other presiding officer may limit 
the opportunity to be heard to an opportunity of a party or a party's 
representative to respond orally immediately after the act or inaction 
covered by this section is noted by the ALJ or other presiding officer.
    (3) Requests for the imposition of sanctions by any party, and the 
imposition of sanctions, are subject to interlocutory review pursuant 
to Sec.  19.25 in the same manner as any other ruling.
    (d) Section not exclusive. This section does not preclude the ALJ 
or other presiding officer or the Comptroller from taking any other 
action, or imposing any restriction or sanction, authorized by 
applicable statute or regulation.


Sec.  19.193  Censure, suspension, or debarment.

    The Comptroller may censure an individual or suspend or debar an 
individual from practice before the OCC if the individual is 
incompetent in representing a client's rights or interest in a 
significant matter before the OCC; or engages, or has engaged, in 
disreputable conduct; or refuses to comply with the rules and 
regulations in this part; or with intent to defraud in any manner, 
willfully and knowingly deceives, misleads, or threatens any client or 
prospective client. The suspension or debarment of an individual may be 
initiated only upon a finding by the Comptroller that the basis for the 
disciplinary action is sufficiently egregious.


Sec.  19.194  Eligibility of attorneys and accountants to practice.

    (a) Attorneys. Any attorney not currently under suspension or 
debarment pursuant to this subpart may practice before the OCC.
    (b) Accountants. Any accountant not currently under suspension or 
debarment by the OCC may practice before the OCC.


Sec.  19.195  Incompetence.

    Incompetence in the representation of a client's rights and 
interests in a significant matter before the OCC is grounds for 
suspension or debarment. The term ``incompetence'' encompasses conduct 
that reflects a lack of the knowledge, judgment, and skill that a 
professional would ordinarily and reasonably be expected to exercise in 
adequately representing the rights and interests of a client. Such 
conduct includes, but is not limited to:
    (a) Handling a matter that the individual knows or should know that 
they are not competent to handle, without associating with a 
professional who is competent to handle such matter;
    (b) Handling a matter without adequate preparation under the 
circumstances; or
    (c) Neglect in a matter entrusted to him or her.


Sec.  19.196  Disreputable conduct.

    Disreputable conduct for which an individual may be censured, 
debarred, or suspended from practice before the OCC includes:
    (a) Willfully or recklessly violating or willfully or recklessly 
aiding and abetting the violation of any provision of the Federal 
banking or applicable securities laws or the rules and regulations 
thereunder or conviction of any offense involving dishonesty or breach 
of trust;
    (b) Knowingly or recklessly giving false or misleading information, 
or participating in any way in the giving of false information to the 
OCC or any officer or employee thereof, or to any tribunal authorized 
to pass upon matters administered by the OCC in connection

[[Page 89862]]

with any matter pending or likely to be pending before it. The term 
``information'' includes facts or other statements contained in 
testimony, financial statements, applications for enrollment, 
affidavits, declarations, or any other document or written or oral 
statement;
    (c) Directly or indirectly attempting to influence, or offering or 
agreeing to attempt to influence, the official action of any officer or 
employee of the OCC by the use of threats, false accusations, duress, 
or coercion; by the offer of any special inducement or promise of 
advantage; or by the bestowing of any gift, favor, or thing of value;
    (d) Disbarment or suspension from practice as an attorney, or 
debarment or suspension from practice as a certified public accountant 
or public accountant, by any duly constituted authority of any state, 
possession, or commonwealth of the United States or the District of 
Columbia for the conviction of a felony or misdemeanor involving moral 
turpitude, where the conviction has not been reversed on appeal;
    (e) Knowingly aiding or abetting another individual to practice 
before the OCC during that individual's period of suspension, 
debarment, or ineligibility;
    (f) Contemptuous conduct in connection with practice before the 
OCC, and knowingly making false accusations and statements, or 
circulating or publishing malicious or libelous matter;
    (g) Suspension, debarment, or removal from practice before the 
Board of Governors, the FDIC, the former OTS, the Securities and 
Exchange Commission, the Commodity Futures Trading Commission, or any 
other Federal or state agency; and
    (h) Willfully violating any of the regulations contained in this 
part.


Sec.  19.197  Initiation of disciplinary proceeding.

    (a) Receipt of information. An individual, including any employee 
of the OCC, who has reason to believe that an individual practicing 
before the OCC in a representative capacity has engaged in any conduct 
that would serve as a basis for censure, suspension, or debarment under 
this subpart, may make a report thereof and forward it to the OCC or to 
such person as may be delegated responsibility for such matters by the 
Comptroller.
    (b) Censure without formal proceeding. Upon receipt of information 
regarding an individual's qualification to practice before the OCC, the 
Comptroller may, after giving the individual notice and opportunity to 
respond, censure such individual.
    (c) Institution of formal disciplinary proceeding. When the 
Comptroller has reason to believe that any individual who practices 
before the OCC in a representative capacity has engaged in conduct that 
would serve as a basis for censure, suspension, or debarment under 
Sec.  19.192, the Comptroller may, after giving the individual notice 
and opportunity to respond, institute a formal disciplinary proceeding 
against such individual. The proceeding will be conducted pursuant to 
Sec.  19.199 and initiated by a complaint that names the individual as 
a respondent and is signed by the Comptroller. Except in cases of 
willfulness, or when time, the nature of the proceeding, or the public 
interest do not permit, a proceeding under this section may not be 
commenced until the respondent has been informed, in writing, of the 
facts or conduct that warrant institution of a proceeding and the 
respondent has been accorded the opportunity to comply with all lawful 
requirements or take whatever action may be necessary to remedy the 
conduct that is the basis for the commencement of the proceeding.


Sec.  19.198  Conferences.

    (a) General. The Comptroller may confer with a proposed respondent 
concerning allegations of misconduct or other grounds for censure, 
debarment, or suspension, regardless of whether a proceeding for 
censure, debarment, or suspension has been commenced. If a conference 
results in a stipulation in connection with a proceeding in which the 
individual is the respondent, the stipulation may be entered in the 
record at the request of either party to the proceeding.
    (b) Voluntary suspension or debarment. In order to avoid the 
institution of, or a decision in, a debarment or suspension proceeding, 
a person who practices before the OCC may consent to suspension or 
debarment from practice. At the discretion of the Comptroller, the 
individual may be suspended or debarred in accordance with the consent 
offered.


Sec.  19.199  Proceedings under this subpart.

    Any hearing held under this subpart is held before an ALJ pursuant 
to procedures set forth in subpart A of this part. The Comptroller will 
appoint a person to represent the OCC in the hearing. Any person having 
prior involvement in the matter that is the basis for the suspension or 
debarment proceeding is disqualified from representing the OCC in the 
hearing. The hearing will be closed to the public unless the 
Comptroller, on the Comptroller's initiative or on the request of a 
party, otherwise directs. The ALJ will issue a recommended decision to 
the Comptroller, who will issue the final decision and order. The 
Comptroller may censure, debar, or suspend an individual, or take such 
other disciplinary action as the Comptroller deems appropriate.


Sec.  19.200  Effect of debarment, suspension, or censure.

    (a) Debarment. If the final order against the respondent is for 
debarment, the individual may not practice before the OCC unless 
otherwise permitted to do so by the Comptroller pursuant to Sec.  
19.201.
    (b) Suspension. If the final order against the respondent is for 
suspension, the individual may not practice before the OCC during the 
period of suspension.
    (c) Censure. If the final order against the respondent is for 
censure, the individual may be permitted to practice before the OCC, 
but such individual's future representations may be subject to 
conditions designed to promote high standards of conduct. If a written 
letter of censure is issued, a copy will be maintained in the OCC's 
files.
    (d) Notice of debarment or suspension. Upon the issuance of a final 
order for suspension or debarment, the Comptroller will give notice of 
the order to appropriate officers and employees of the OCC and to 
interested departments and agencies of the Federal government. The 
Comptroller will also give notice to the appropriate authorities of the 
state in which any debarred or suspended individual is or was licensed 
to practice.


Sec.  19.201  Petition for reinstatement.

    At the expiration of the period of time designated in the order of 
debarment, the Comptroller may entertain a petition for reinstatement 
from any person debarred from practice before the OCC. The Comptroller 
may grant reinstatement only if satisfied that the petitioner is likely 
to act in accordance with the regulations in this part, and that 
granting reinstatement would not be contrary to the public interest. 
Any request for reinstatement is limited to written submissions unless 
the Comptroller, at the Comptroller's discretion, affords the 
petitioner a hearing.

Subpart L--Equal Access to Justice Act


Sec.  19.205  Authority and scope; waiver.

    (a) In general. This subpart implements section 203 of the Equal 
Access to Justice Act (EAJA) (5 U.S.C. 504). EAJA provides for the 
award of

[[Page 89863]]

attorney fees and other expenses to eligible individuals and entities 
that are parties in certain administrative proceedings (adversary 
adjudications) before agencies of the Government of the United States. 
An eligible party may receive an award when it prevails over an agency 
unless the agency's position was substantially justified or special 
circumstances make an award unjust. However, no presumption under this 
subpart arises that the agency's position was not substantially 
justified because the agency did not prevail.
    (b) Scope. The types of adversary adjudications covered by this 
subpart are those proceedings listed in Sec. Sec.  19.1, 19.110, 
19.120, 19.190, 19.230, and 19.241.
    (c) Waiver. After reasonable notice to the parties, the presiding 
officer or the OCC may waive, for good cause shown, any provision 
contained in this subpart as long as the waiver is consistent with the 
terms and purpose of EAJA.


Sec.  19.206  Definitions.

    For purposes of this subpart:
    (a) Adversary adjudication means an adjudication under 5 U.S.C. 554 
in which the position of the OCC is represented by Enforcement Counsel.
    (b) Final disposition means the date on which a decision or order 
disposing of the merits of a proceeding or any other complete 
resolution of the proceeding, such as a settlement or voluntary 
dismissal, becomes final and unappealable both within the OCC and to 
the courts.
    (c) Party means a party, as defined in 5 U.S.C. 551(3), that is:
    (1) An individual whose net worth did not exceed $2,000,000 at the 
time the adversary adjudication was initiated; or
    (2) Any owner of an unincorporated business, or any partnership, 
corporation, association, unit of local government, or organization, 
the net worth of which did not exceed $7,000,000 at the time the 
adversary adjudication was initiated, and which had not more than 500 
employees at the time the adversary adjudication was initiated; except 
that an organization described in section 501(c)(3) of the Internal 
Revenue Code of 1986 (the Code) exempt from taxation under section 
501(a) of the Code, or a cooperative association as defined in section 
15(a) of the Agricultural Marketing Act, may be a party regardless of 
the net worth of the organization or cooperative association. The net 
worth and number of employees of the applicant and any of its 
affiliates must be aggregated when determining the applicability of 
this paragraph (c).
    (d) Position of the OCC means, in addition to the position taken by 
the OCC in the adversary adjudication, the action or failure to act by 
the OCC upon which the adversary adjudication is based, except that 
fees and other expenses may not be awarded to a party for any portion 
of the adversary adjudication in which the party has unreasonably 
protracted the proceedings.
    (e) Presiding officer means the official, whether the official is 
designated as an ALJ or otherwise, that presided over the adversary 
adjudication or the official that presides over an EAJA proceeding.


 Sec.  19.207  Application requirements.

    (a) Timing of application. A party seeking an award under this 
subpart must file an application with the OCC within 30 days after the 
OCC's final disposition of the adversary adjudication.
    (b) Contents of application. An application for an award of fees 
and expenses under this section must:
    (1) Identify the applicant and the proceeding for which an award is 
sought;
    (2) Show that the applicant has prevailed and identify the position 
of the OCC that the applicant alleges was not substantially justified;
    (3) State the basis for the applicant's belief that the OCC 
position was not substantially justified;
    (4) Unless the applicant is an individual, state the number of 
employees of the applicant and describe briefly the type and purpose of 
its organization or business;
    (5) Show that the applicant meets the definition of ``party'' in 
Sec.  19.206(c), including documentation of its net worth pursuant to 
Sec.  19.208, if applicable;
    (6) State the amount of fees and expenses for which an award is 
sought, as documented pursuant to Sec.  19.209;
    (7) Be signed by the applicant if the applicant is an individual or 
by an authorized officer or attorney of the applicant;
    (8) Any other matter the applicant wishes the OCC to consider in 
determining whether and in what amount an award should be made; and
    (9) Contain or be accompanied by a written verification under 
penalty of perjury that the information provided in the application is 
true and correct.
    (c) Referral of application. Upon receipt of an EAJA application, 
the OCC will, if feasible, refer the matter to the official who heard 
the underlying adversary adjudication.


Sec.  19.208  Net worth exhibit.

    (a) Required information. Each applicant, except a qualified tax-
exempt organization or cooperative association, must provide with its 
application a detailed exhibit showing the net worth of the applicant 
and, where appropriate, any of its affiliates at the time the adversary 
adjudication was initiated. Except as otherwise provided in this 
section, this exhibit may be in any form convenient to the applicant 
that provides full disclosure of the applicant's and its affiliates' 
assets and liabilities and is sufficient to determine whether the 
applicant qualifies under the standards in this subpart. A presiding 
officer may require an applicant to file additional information to 
determine its eligibility for an award.
    (1) An unaudited financial statement is acceptable for individual 
applicants as long as the statement provides a reliable basis for 
evaluation, unless the presiding officer or the OCC otherwise requires. 
Financial statements or reports filed with or reported to a Federal or 
State agency before the initiation of the adversary adjudication for 
other purposes and accurate as of a date not more than three months 
prior to the initiation of the proceeding are acceptable in 
establishing net worth as of the time of the initiation of the 
proceeding, unless the presiding officer or the OCC otherwise requires.
    (2) In the case of applicants or affiliates that are not banks or 
savings associations, net worth will be considered for the purposes of 
this subpart to be the excess of total assets over total liabilities as 
of the date the underlying proceeding was initiated.
    (3) If the applicant or any of its affiliates is a bank or a 
savings association, the portion of the statement of net worth that 
relates to the bank or the savings association must consist of a copy 
of the bank's or savings association's last Consolidated Report of 
Condition and Income filed before the initiation of the adversary 
adjudication. Net worth will be considered for the purposes of this 
subpart to be the total equity capital as reported, in conformity with 
applicable instructions and guidelines, on the bank's or the savings 
association's Consolidated Report of Condition and Income filed for the 
last reporting date before the initiation of the proceeding.
    (b) Confidentiality of net worth submissions. Ordinarily, the net 
worth exhibit will be included in the public record of the proceeding. 
However, an applicant that objects to public disclosure of information 
in any portion of the exhibit and believes there are legal grounds for 
withholding it from

[[Page 89864]]

disclosure may request that the documents be filed under seal or 
otherwise be treated as confidential.


Sec.  19.209  Documentation of fees and expenses.

    The application must be accompanied by adequate documentation of 
the fees and expenses incurred after initiation of the adversary 
adjudication, including the cost of any study, analysis, report, test, 
or project. An application seeking an increase in fees to account for 
inflation pursuant to Sec.  19.215(d)(1)(i) also must include adequate 
documentation of the change in the consumer price index for the 
attorney or agent's locality. The applicant must submit a separate 
itemized statement for each professional firm or individual whose 
services are covered by the application showing the hours spent in 
connection with the proceeding by each individual, a description of the 
specific services performed, the rate at which each fee has been 
computed, any expenses for which reimbursement is sought, the total 
amount claimed, and the total amount paid or payable by the applicant 
or by any other person or entity for the services provided. The 
presiding officer may require the applicant to provide vouchers, 
receipts, or other substantiation for any fees or expenses claimed.


Sec.  19.210  Filing and service of documents.

    Any application for an award, or any accompanying documentation 
related to an application, must be filed and served on all parties to 
the proceeding in accordance with Sec.  19.11, except as provided in 
Sec.  19.208(b) for confidential financial information.


Sec.  19.211  Answer to application.

    (a) Filing of answer. Except as provided in Sec.  19.213, 
Enforcement Counsel may file an answer to an application within 30 days 
after service of the application. Unless Enforcement Counsel requests 
an extension of time for filing or files a statement of intent to 
negotiate a settlement under Sec.  19.213, failure to file an answer 
within the 30-day period may be treated as a consent to the award 
requested.
    (b) Content of answer. The answer must explain in detail any 
objections to the award requested and identify the facts relied on in 
support of the Enforcement Counsel's position. If the answer is based 
on any alleged facts not already in the record of the proceeding, 
Enforcement Counsel must include with the answer either supporting 
affidavits or a request for further proceedings under Sec.  19.214.


Sec.  19.212  Reply.

    Within 15 days after service of an answer, the applicant may file a 
reply. If the reply is based on any alleged facts not already in the 
record of the proceeding, the applicant must include with the reply 
either supporting affidavits or a request for further proceedings under 
Sec.  19.214.


Sec.  19.213  Settlement.

    The applicant and Enforcement Counsel may agree on a proposed 
settlement of the award before final action on the application, either 
in connection with a settlement of the underlying proceeding or after 
the underlying proceeding has been concluded, in accordance with Sec.  
19.15. If a prevailing party and Enforcement Counsel agree on a 
proposed settlement of an award before an application has been filed, 
the application must be filed with the proposed settlement. If a 
proposed settlement of an underlying proceeding provides that each side 
must bear its own expenses and the settlement is accepted, no 
application may be filed. If, after an application is filed, 
Enforcement Counsel and the applicant believe that the issues in the 
application can be settled, they may jointly file a statement of their 
intent to negotiate a settlement. The filing of this statement will 
extend, under Sec.  19.211, the time for filing an answer for an 
additional 30 days, and further extensions may be granted by the 
presiding officer upon request by Enforcement Counsel and the 
applicant.


Sec.  19.214  Further proceedings.

    (a) Process for requesting further proceedings or additional 
information. At the request of either the applicant or Enforcement 
Counsel, or on the presiding officer's own initiative, the presiding 
officer may, if necessary for a full and fair decision on the 
application, order the filing of additional written submissions; hold 
an informal conference or oral argument; or allow for discovery or hold 
an evidentiary hearing with respect to issues other than whether the 
OCC's position was substantially justified (such as those involving the 
applicant's eligibility or substantiation of fees or expenses). Any 
written submissions must be made, oral argument held, discovery 
conducted, and evidentiary hearing held as promptly as possible so as 
not to delay a decision on the application for fees.
    (b) Requirement to identify additional information sought and 
reason for requesting additional proceedings. A request for further 
proceedings under this section must specifically identify the 
information sought or the disputed issues and must explain why the 
additional proceedings are necessary to resolve the issues.


Sec.  19.215  Decision.

    (a) Basis for decision. The presiding officer must determine 
whether the position of the OCC was substantially justified on the 
basis of the administrative record as a whole of the adversary 
adjudication for which fees and other expenses are sought.
    (b) Timing of decision. The presiding officer in a proceeding under 
this subpart will issue a recommended decision, in writing, on the 
application within 90 days after the time for filing a reply or, when 
further proceedings are held, within 90 days after completion of 
proceedings.
    (c) Contents of decision. The decision on the application must 
include written findings and conclusions on the applicant's eligibility 
and status as a prevailing party, and, if applicable, an explanation of 
the reasons for any difference between the amount requested and the 
amount awarded. The decision also must include, if applicable, findings 
on whether Enforcement Counsel's or the OCC's position was 
substantially justified, whether the applicant unduly and unreasonably 
protracted the adversary adjudication, or whether special circumstances 
make an award unjust.
    (d) Awards.--(1) In general. Awards under this subpart may include 
the reasonable expenses of expert witnesses; the reasonable cost of any 
study, analysis, report, test, or project; and reasonable attorney or 
agent fees. The applicant must have incurred these expenses, costs, and 
fees after initiation of the adversary adjudication subject to the EAJA 
application. The presiding officer will base awards on prevailing 
market rates for the kind and quality of the services furnished, even 
if the services were provided without charge or at reduced rate to the 
applicant, except that:
    (i) No award for the fee of an attorney or agent under this subpart 
may exceed the hourly rate specified in 5 U.S.C. 504(b)(1)(A) except to 
account for inflation since the last update of the statute's maximum 
award upon the request of the applicant as documented in the 
application pursuant to Sec.  19.209 or if a special factor, such as 
the limited availability of qualified attorneys or agents for the 
proceedings involved, justifies a higher fee; and
    (ii) No award to compensate an expert witness may exceed the 
highest rate at which the OCC pays expert witnesses.
    (2) Award for fees of an attorney, agent, or expert witness. In 
determining

[[Page 89865]]

the reasonableness of the fee sought for an attorney, agent, or expert 
witness the presiding officer should consider:
    (i) If in private practice, the attorney's, agent's, or witness' 
customary fee for similar services;
    (ii) If an employee of the applicant, the fully allocated cost of 
the attorney's, agent's, or witness' services;
    (iii) The prevailing rate for similar services in the community in 
which the attorney, agent, or witness ordinarily perform services;
    (iv) The time actually spent in the representation of the 
applicant;
    (v) The time reasonably spent in light of the difficulty or 
complexity of the issues in the proceeding; and
    (vi) Any other factors that may bear on the value of the services 
provided.
    (3) Awards for costs of a study, analysis, report, test, project, 
or similar matter. The presiding officer may award the reasonable cost 
of any study, analysis, report, test, project, or similar matter 
prepared on behalf of the applicant to the extent that the charge for 
the service does not exceed the prevailing rate for similar services 
and the presiding officer finds that the study or other matter was 
necessary for preparation of the applicant's case.
    (4) Reduction or denial of an award. A presiding officer may reduce 
the amount to be awarded, or deny any award, to the extent that the 
party during the course of the proceedings engaged in conduct which 
unduly and unreasonably protracted the final resolution of the matter 
in controversy or if special circumstances make the award sought 
unjust.
    (e) Final agency decision. The Comptroller will issue a final 
decision on the application or remand the application to the presiding 
officer for further proceedings in accordance with Sec.  19.40.


Sec.  19.216  Agency review.

    Either the applicant or Enforcement Counsel may seek review of the 
presiding officer's decision on the fee application, in accordance with 
Sec.  19.39.


Sec.  19.217  Judicial review.

    An applicant may seek judicial review of final agency decisions on 
awards made under this section as provided in 5 U.S.C. 504(c)(2).


Sec.  19.218  Stay of decision concerning award.

    Any proceedings on an application for fees under this subpart will 
be automatically stayed until the OCC's final disposition of the 
decision on which the application is based and either the time period 
for seeking judicial review expires, or if review has been sought, 
until final disposition is made by a court and no further judicial 
review is available.


Sec.  19.219  Payment of award.

    (a) Requirement to submit final decision. An applicant seeking 
payment of an award must submit to the OCC's Litigation Group a copy of 
the OCC's final decision granting the award, accompanied by a 
certification that the applicant will not seek review of the decision 
in the United States courts. Applicants should send the submissions to: 
Office of the Comptroller of the Currency, Washington, DC 20219, 
Attention: Director, Litigation Group.
    (b) Time frame for award payment. The OCC will pay the amount 
awarded to the applicant within 90 days.

Subpart M--Procedures for Reclassifying an Insured Depository 
Institution Based on Criteria Other Than Capital Under Prompt 
Corrective Action


Sec.  19.220  Scope.

    This subpart applies to the procedures afforded to any insured 
depository institution that has been reclassified to a lower capital 
category by a notice or order issued by the OCC pursuant to section 38 
of the FDIA (12 U.S.C. 1831o) and 12 CFR part 6 (prompt corrective 
action). For purposes of this subpart, insured depository institution 
means an insured national bank, an insured Federal savings association, 
an insured Federal savings bank, or an insured Federal branch of a 
foreign bank.


Sec.  19.221  Reclassification of an insured depository institution 
based on unsafe or unsound condition or practice.

    (a) Issuance of notice of proposed reclassification--(1) Grounds 
for reclassification. (i) Pursuant to Sec.  6.4 of this chapter, the 
OCC may reclassify a well capitalized insured depository institution as 
adequately capitalized or subject an adequately capitalized or 
undercapitalized insured depository institution to the supervisory 
actions applicable to the next lower capital category if:
    (A) The OCC determines that the insured depository institution is 
in an unsafe or unsound condition; or
    (B) The OCC deems the insured depository institution to be engaging 
in an unsafe or unsound practice and not to have corrected the 
deficiency.
    (ii) Any action pursuant to this paragraph (a)(1) is referred to in 
this subpart as ``reclassification.''
    (2) Prior notice to institution. Prior to taking action pursuant to 
Sec.  6.4 of this chapter, the OCC will issue and serve on the insured 
depository institution a written notice of the OCC's intention to 
reclassify the insured depository institution.
    (b) Contents of notice. A notice of intention to reclassify an 
insured depository institution based on unsafe or unsound condition 
will include:
    (1) A statement of the insured depository institution's capital 
measures and capital levels and the category to which the insured 
depository institution would be reclassified;
    (2) The reasons for reclassification of the insured depository 
institution; and
    (3) The date by which the insured depository institution subject to 
the notice of reclassification may file with the OCC a written response 
to the proposed reclassification and a request for a hearing, which 
must be at least 14 calendar days from the date of service of the 
notice unless the OCC determines that a shorter period is appropriate 
in light of the financial condition of the insured depository 
institution or other relevant circumstances.
    (c) Response to notice of proposed reclassification. An insured 
depository institution may file a written response to a notice of 
proposed reclassification within the time period set by the OCC. The 
response should include:
    (1) An explanation of why the insured depository institution is not 
in unsafe or unsound condition or otherwise should not be reclassified; 
and
    (2) Any other relevant information, mitigating circumstances, 
documentation, or other evidence in support of the position of the 
insured depository institution or company regarding the 
reclassification.
    (d) Failure to file response. Failure by an insured depository 
institution to file, within the specified time period, a written 
response with the OCC to a notice of proposed reclassification will 
constitute a waiver of the opportunity to respond and will constitute 
consent to the reclassification.
    (e) Request for hearing and presentation of oral testimony or 
witnesses. The response may include a request for an informal hearing 
before the OCC under this section. If the insured depository 
institution desires to present oral testimony or witnesses at the 
hearing, the insured depository institution must include a request to 
do so with the request for an informal hearing. A request to present 
oral testimony or witnesses must specify the names of the witnesses and 
the general nature of their expected testimony. Failure to request a 
hearing will constitute a waiver of any right to a hearing, and failure 
to request the opportunity to present oral testimony or

[[Page 89866]]

witnesses will constitute a waiver of any right to present oral 
testimony or witnesses.
    (f) Order for informal hearing. Upon receipt of a timely written 
request that includes a request for a hearing, the OCC will issue an 
order directing an informal hearing to commence no later than 30 days 
after receipt of the request, unless the OCC allows further time at the 
request of the insured depository institution. The hearing will be held 
in Washington, DC or at such other place as may be designated by the 
OCC before a presiding officer(s) designated by the OCC to conduct the 
hearing.
    (g) Hearing procedures. (1) The insured depository institution has 
the right to introduce relevant written materials and to present oral 
argument at the hearing. The insured depository institution may 
introduce oral testimony and present witnesses only if expressly 
authorized by the OCC or the presiding officer(s). Neither the 
provisions of the Administrative Procedure Act (5 U.S.C. 554-557) 
governing adjudications required by statute to be determined on the 
record nor the Uniform Rules apply to an informal hearing under this 
section unless the OCC orders that such procedures will apply.
    (2) The informal hearing will be recorded and a transcript 
furnished to the insured depository institution upon request and 
payment of the cost thereof. Witnesses need not be sworn unless 
specifically requested by a party or the presiding officer(s). If so 
requested, and by stipulation of the parties or by order of the 
presiding officer, a court reporter or other person authorized to 
administer an oath may administer the oath remotely without being in 
the physical presence of the witness. The presiding officer(s) may ask 
questions of any witness.
    (3) Based on the circumstances of each hearing, the presiding 
officer may direct the use of, or any party may elect to use, an 
electronic presentation during the hearing. If the presiding officer 
requires an electronic presentation during the hearing, each party will 
be responsible for its own presentation and related costs unless the 
parties agree to another manner by which to allocate presentation 
responsibilities and costs.
    (4) The presiding officer(s) may order that the hearing be 
continued for a reasonable period (normally five business days) 
following completion of oral testimony or argument to allow additional 
written submissions to the hearing record.
    (h) Recommendation of presiding officer(s). Within 20 calendar days 
following the date the hearing and the record on the proceeding are 
closed, the presiding officer(s) will make a recommendation to the OCC 
on the reclassification.
    (i) Time for decision. Not later than 60 calendar days after the 
date the record is closed or the date of the response in a case where 
no hearing was requested, the OCC will decide whether to reclassify the 
insured depository institution and notify the insured depository 
institution of the OCC's decision.


Sec.  19.222  Request for rescission of reclassification.

    Any insured depository institution that has been reclassified under 
part 6 of this chapter and this subpart, may, upon a change in 
circumstances, request in writing that the OCC reconsider the 
reclassification, and may propose that the reclassification be 
rescinded and that any directives issued in connection with the 
reclassification be modified, rescinded, or removed. Unless otherwise 
ordered by the OCC, the insured depository institution will remain 
subject to the reclassification and to any directives issued in 
connection with that reclassification while such request is pending 
before the OCC.

Subpart N--Order To Dismiss a Director or Senior Executive Officer 
Under Prompt Corrective Action


Sec.  19.230  Scope.

    This subpart applies to informal hearings afforded to any director 
or senior executive officer dismissed pursuant to an order issued under 
section 38 of the FDIA (12 U.S.C. 1831o) and 12 CFR part 6 (prompt 
corrective action). For purposes of this subpart, insured depository 
institution means an insured national bank, an insured Federal savings 
association, an insured Federal savings bank, or an insured Federal 
branch of a foreign bank.


Sec.  19.231  Order to dismiss a director or senior executive officer.

    (a) Service of notice. When the OCC issues and serves a directive 
on an insured depository institution pursuant to subpart B of 12 CFR 
part 6 requiring the insured depository institution to dismiss from 
office any director or senior executive officer under section 
38(f)(2)(F)(ii) of the FDIA, the OCC will also serve a copy of the 
directive, or the relevant portions of the directive where appropriate, 
upon the person to be dismissed.
    (b) Response to directive--(1) Request for reinstatement. A 
director or senior executive officer who has been served with a 
directive under paragraph (a) of this section (Respondent) may file a 
written request for reinstatement. The Respondent must file this 
request for reinstatement within 10 calendar days of the receipt of the 
OCC directive, unless further time is allowed by the OCC at the request 
of the Respondent. Failure by the Respondent to file a written request 
for reinstatement with the OCC within the specified time period will 
constitute a waiver of the opportunity to respond and will constitute 
consent to the dismissal.
    (2) Contents of request; informal hearing. The request for 
reinstatement must include reasons why the Respondent should be 
reinstated and may include a request for an informal hearing before the 
OCC or its designee under this section. If the Respondent desires to 
present oral testimony or witnesses at the hearing, the Respondent must 
include a request to do so with the request for an informal hearing. 
The request to present oral testimony or witnesses must specify the 
names of the witnesses and the general nature of their expected 
testimony. Failure to request a hearing will constitute a waiver of any 
right to a hearing, and failure to request the opportunity to present 
oral testimony or witnesses will constitute a waiver of any right or 
opportunity to present oral testimony or witnesses.
    (3) Effective date. Unless otherwise ordered by the OCC, the 
dismissal will remain in effect while a request for reinstatement is 
pending.
    (c) Order for informal hearing. Upon receipt of a timely written 
request from a Respondent for an informal hearing on the portion of a 
directive requiring an insured depository institution to dismiss from 
office any director or senior executive officer, the OCC will issue an 
order directing an informal hearing to commence no later than 30 days 
after receipt of the request, unless the OCC allows further time at the 
request of the Respondent. The hearing will be held in Washington, DC, 
or at such other place as may be designated by the OCC, before a 
presiding officer(s) designated by the OCC to conduct the hearing.
    (d) Hearing procedures--(1) Role of respondent. A Respondent may 
appear at the hearing personally or through counsel. A Respondent has 
the right to introduce relevant written materials and to present oral 
argument at the hearing.
    (2) Application of Administrative Procedure Act and Uniform Rules. 
Neither the provisions of the Administrative Procedure Act (5 U.S.C. 
554-557) governing adjudications required by statute to be determined 
on the record nor the Uniform Rules apply to an informal hearing under 
this

[[Page 89867]]

section unless the OCC orders that such procedures will apply.
    (3) Electronic presentation. Based on the circumstances of each 
hearing, the presiding officer may direct the use of, or any party may 
elect to use, an electronic presentation during the hearing. If the 
presiding officer requires an electronic presentation during the 
hearing, each party will be responsible for its own presentation and 
related costs unless the parties agree to another manner in which to 
allocate presentation responsibilities and costs.
    (4) Recordings; transcript. The informal hearing will be recorded 
and a transcript furnished to the Respondent upon request and payment 
of the cost thereof.
    (5) Witnesses. A Respondent may introduce oral testimony and 
present witnesses only if expressly authorized by the OCC or the 
presiding officer(s). Witnesses need not be sworn, unless specifically 
requested by a party or the presiding officer(s). If so requested, and 
by stipulation of the parties or by order of the presiding officer, a 
court reporter or other person authorized to administer an oath may 
administer the oath remotely without being in the physical presence of 
the witness. The presiding officer(s) may ask questions of any witness.
    (6) Continuance. The presiding officer(s) may order that the 
hearing be continued for a reasonable period (normally five business 
days) following completion of oral testimony or argument to allow 
additional written submissions to the hearing record.
    (e) Standard for review. A Respondent bears the burden of 
demonstrating that their continued employment by or service with the 
insured depository institution would materially strengthen the insured 
depository institution's ability:
    (1) To become adequately capitalized, to the extent that the 
directive was issued as a result of the insured depository 
institution's capital level or failure to submit or implement a capital 
restoration plan; and
    (2) To correct the unsafe or unsound condition or unsafe or unsound 
practice, to the extent that the directive was issued as a result of 
classification of the insured depository institution based on 
supervisory criteria other than capital, pursuant to section 38(g) of 
the FDIA.
    (f) Recommendation of presiding officer. Within 20 calendar days 
following the date the hearing and the record on the proceeding are 
closed, the presiding officer(s) will make a recommendation to the OCC 
concerning the Respondent's request for reinstatement with the insured 
depository institution.
    (g) Time for decision. Not later than 60 calendar days after the 
date the record is closed or the date of the response in a case where 
no hearing was requested, the OCC will grant or deny the request for 
reinstatement and notify the Respondent of the OCC's decision. If the 
OCC denies the request for reinstatement, the OCC will set forth in the 
notification the reasons for the OCC's action.

Subpart O--Civil Money Penalty Inflation Adjustments


Sec.  19.240  Inflation adjustments.

    (a) Statutory formula to calculate inflation adjustments. The OCC 
is required by statute to annually adjust for inflation the maximum 
amount of each civil money penalty within its jurisdiction to 
administer. The OCC calculates the inflation adjustment by multiplying 
the maximum dollar amount of the civil money penalty for the previous 
calendar year by the cost-of-living inflation adjustment multiplier 
provided annually by the Office of Management and Budget and rounding 
the total to the nearest dollar.
    (b) Notice of inflation adjustments. The OCC will publish notice in 
the Federal Register of the maximum penalties which may be assessed on 
an annual basis on or before January 15 of each calendar year based on 
the formula in paragraph (a) of this section, for penalties assessed 
on, or after, the date of publication of the most recent notice related 
to conduct occurring on, or after, November 2, 2015.

Subpart P--Removal, Suspension, and Debarment of Accountants From 
Performing Audit Services


Sec.  19.241  Scope.

    This subpart, which implements section 36(g)(4) of the FDIA (12 
U.S.C. 1831m(g)(4)), provides rules and procedures for the removal, 
suspension, or debarment of independent public accountants and their 
accounting firms from performing independent audit and attestation 
services required by section 36 of the FDIA (12 U.S.C. 1831m) for 
insured national banks, insured Federal savings associations, and 
insured Federal branches of foreign banks.


Sec.  19.242  Definitions.

    As used in this subpart, the following terms have the meaning given 
below unless the context requires otherwise:
    (a) Accounting firm means a corporation, proprietorship, 
partnership, or other business firm providing audit services.
    (b) Audit services means any service required to be performed by an 
independent public accountant by section 36 of the FDIA (12 U.S.C. 
1831m) and 12 CFR part 363, including attestation services.
    (c) Independent public accountant (accountant) means any individual 
who performs or participates in providing audit services.


Sec.  19.243  Removal, suspension, or debarment.

    (a) Good cause for removal, suspension, or debarment--(1) 
Individuals. The Comptroller may remove, suspend, or debar an 
independent public accountant from performing audit services for 
insured national banks, insured Federal savings associations, or 
insured Federal branches of foreign banks that are subject to section 
36 of the FDIA (12 U.S.C. 1831m) if, after service of a notice of 
intention and opportunity for hearing in the matter, the Comptroller 
finds that the accountant:
    (i) Lacks the requisite qualifications to perform audit services;
    (ii) Has knowingly or recklessly engaged in conduct that results in 
a violation of applicable professional standards, including those 
standards and conflicts of interest provisions applicable to 
accountants through the Sarbanes-Oxley Act of 2002, Public Law 107-204, 
116 Stat. 745 (2002) (Sarbanes-Oxley Act), and developed by the Public 
Company Accounting Oversight Board and the Securities and Exchange 
Commission;
    (iii) Has engaged in negligent conduct in the form of:
    (A) A single instance of highly unreasonable conduct that results 
in a violation of applicable professional standards in circumstances in 
which an accountant knows, or should know, that heightened scrutiny is 
warranted; or
    (B) Repeated instances of unreasonable conduct, each resulting in a 
violation of applicable professional standards, that indicate a lack of 
competence to perform audit services;
    (iv) Has knowingly or recklessly given false or misleading 
information, or knowingly or recklessly participated in any way in the 
giving of false or misleading information, to the OCC or any officer or 
employee of the OCC;
    (v) Has engaged in, or aided and abetted, a material and knowing or 
reckless violation of any provision of the Federal banking or 
securities laws or the rules and regulations thereunder, or any other 
law;
    (vi) Has been removed, suspended, or debarred from practice before 
any Federal or State agency regulating the

[[Page 89868]]

banking, insurance, or securities industries, other than by an action 
listed in Sec.  19.244, on grounds relevant to the provision of audit 
services; or
    (vii) Is suspended or debarred for cause from practice as an 
accountant by any duly constituted licensing authority of any State, 
possession, commonwealth, or the District of Columbia.
    (2) Accounting firms. If the Comptroller determines that there is 
good cause for the removal, suspension, or debarment of a member or 
employee of an accounting firm under paragraph (a)(1) of this section, 
the Comptroller also may remove, suspend, or debar such firm or one or 
more offices of such firm. In considering whether to remove, suspend, 
or debar a firm or an office thereof, and the term of any sanction 
against a firm under this section, the Comptroller may consider, for 
example:
    (i) The gravity, scope, or repetition of the act or failure to act 
that constitutes good cause for the removal, suspension, or debarment;
    (ii) The adequacy of, and adherence to, applicable policies, 
practices, or procedures for the accounting firm's conduct of its 
business and the performance of audit services;
    (iii) The selection, training, supervision, and conduct of members 
or employees of the accounting firm involved in the performance of 
audit services;
    (iv) The extent to which managing partners or senior officers of 
the accounting firm have participated, directly, or indirectly through 
oversight or review, in the act or failure to act; and
    (v) The extent to which the accounting firm has, since the 
occurrence of the act or failure to act, implemented corrective 
internal controls to prevent its recurrence.
    (3) Limited scope orders. An order of removal, suspension 
(including an immediate suspension), or debarment may, at the 
discretion of the Comptroller, be made applicable to a particular 
insured national bank, insured Federal savings association, or insured 
Federal branch of a foreign bank or class of insured national banks, 
insured Federal savings associations, or insured Federal branches of 
foreign banks.
    (4) Remedies not exclusive. The remedies provided in this subpart 
are in addition to any other remedies the OCC may have under any other 
applicable provisions of law, rule, or regulation.
    (b) Proceedings to remove, suspend, or debar--(1) Initiation of 
formal removal, suspension, or debarment proceedings. The Comptroller 
may initiate a proceeding to remove, suspend, or debar an accountant or 
accounting firm from performing audit services by issuing a written 
notice of intention to take such action that names the individual or 
firm as a respondent and describes the nature of the conduct that 
constitutes good cause for such action.
    (2) Hearings under paragraph (b) of this section. An accountant or 
firm named as a respondent in the notice issued under paragraph (b)(1) 
of this section may request a hearing on the allegations in the notice. 
Hearings conducted under this paragraph (b)(2) will be conducted in the 
same manner as other hearings under the Uniform Rules of Practice and 
Procedure in subpart A of this part, subject to the limitations in 
paragraph (c)(4) of this section.
    (c) Immediate suspension from performing audit services--(1) In 
general. If the Comptroller serves a written notice of intention to 
remove, suspend, or debar an accountant or accounting firm from 
performing audit services, the Comptroller may, with due regard for the 
public interest and without a preliminary hearing, immediately suspend 
such accountant or firm from performing audit services for insured 
national banks, insured Federal savings associations, or insured 
Federal branches of foreign banks, if the Comptroller:
    (i) Has a reasonable basis to believe that the accountant or firm 
has engaged in conduct (specified in the notice served on the 
accountant or firm under paragraph (b) of this section) that would 
constitute grounds for removal, suspension, or debarment under 
paragraph (a) of this section;
    (ii) Determines that immediate suspension is necessary to avoid 
immediate harm to an insured depository institution or its depositors 
or to the depository system as a whole; and
    (iii) Serves such respondent with written notice of the immediate 
suspension.
    (2) Procedures. An immediate suspension notice issued under this 
paragraph (c)(2) will become effective upon service. Such suspension 
will remain in effect until the date the Comptroller dismisses the 
charges contained in the notice of intention, or the effective date of 
a final order of removal, suspension, or debarment issued by the 
Comptroller to the respondent.
    (3) Petition for stay. Any accountant or firm immediately suspended 
from performing audit services in accordance with paragraph (c)(1) of 
this section may, within 10 calendar days after service of the notice 
of immediate suspension, file with the Office of the Comptroller of the 
Currency, Washington, DC 20219 for a stay of such immediate suspension. 
If no petition is filed within 10 calendar days, the right to a 
petition is waived and the immediate suspension remains in effect 
pursuant to paragraph (c)(2) of this section.
    (4) Hearing on petition. Upon receipt of a stay petition, the 
Comptroller will designate a presiding officer who will fix a place and 
time (not more than 10 calendar days after receipt of the petition, 
unless further time is allowed by the presiding officer at the request 
of petitioner) at which the immediately suspended party may appear, 
personally or through counsel, to submit written materials and oral 
argument. Any OCC employee engaged in investigative or prosecuting 
functions for the OCC in a case may not, in that or a factually related 
case, serve as a presiding officer or participate or advise in the 
decision of the presiding officer or of the OCC, except as witness or 
counsel in the proceeding. In the sole discretion of the presiding 
officer, upon a specific showing of compelling need, oral testimony of 
witnesses may also be presented. In hearings held pursuant to this 
paragraph (c)(4) there will be no discovery and the provisions of 
Sec. Sec.  19.6 through 19.12, 19.16, and 19.21 apply.
    (5) Decision on petition. Within 30 calendar days after the 
hearing, the presiding officer will issue a decision. The presiding 
officer will grant a stay upon a demonstration that a substantial 
likelihood exists of the respondent's success on the issues raised by 
the notice of intention and that, absent such relief, the respondent 
will suffer immediate and irreparable injury, loss, or damage. In the 
absence of such a demonstration, the presiding officer will notify the 
parties that the immediate suspension will be continued pending the 
completion of the administrative proceedings pursuant to the notice.
    (6) Review of presiding officer's decision. The parties may seek 
review of the presiding officer's decision by filing a petition for 
review with the presiding officer within 10 calendar days after service 
of the decision. Replies must be filed within 10 calendar days after 
the petition filing date. Upon receipt of a petition for review and any 
reply, the presiding officer will promptly certify the entire record to 
the Comptroller. Within 60 calendar days of the presiding officer's 
certification, the Comptroller will issue an order notifying the 
affected party whether or not the immediate suspension should be

[[Page 89869]]

continued or reinstated. The order will state the basis of the 
Comptroller's decision.


Sec.  19.244  Automatic removal, suspension, or debarment.

    (a) An independent public accountant or accounting firm may not 
perform audit services for insured national banks, insured Federal 
savings associations, or insured Federal branches of foreign banks if 
the accountant or firm:
    (1) Is subject to a final order of removal, suspension, or 
debarment (other than a limited scope order) issued by the Board of 
Governors of the Federal Reserve System, the Federal Deposit Insurance 
Corporation, or the former Office of Thrift Supervision under section 
36 of the FDIA (12 U.S.C. 1831m);
    (2) Is subject to a temporary suspension or permanent revocation of 
registration or a temporary or permanent suspension or bar from further 
association with any registered public accounting firm issued by the 
Public Company Accounting Oversight Board or the Securities and 
Exchange Commission under sections 105(c)(4)(A) or (B) of the Sarbanes-
Oxley Act (15 U.S.C. 7215(c)(4)(A) or (B)); or
    (3) Is subject to an order of suspension or denial of the privilege 
of appearing or practicing before the Securities and Exchange 
Commission.
    (b) Upon written request, the Comptroller, for good cause shown, 
may grant written permission to such accountant or firm to perform 
audit services for insured national banks, insured Federal savings 
associations, or insured Federal branches of foreign banks. The request 
must contain a concise statement of the action requested. The 
Comptroller may require the applicant to submit additional information.


Sec.  19.245  Notice of removal, suspension, or debarment.

    (a) Notice to the public. Upon the issuance of a final order for 
removal, suspension, or debarment of an independent public accountant 
or accounting firm from providing audit services, the Comptroller will 
make the order publicly available and provide notice of the order to 
the other Federal banking agencies.
    (b) Notice to the Comptroller by accountants and firms. An 
accountant or accounting firm that provides audit services to an 
insured national bank, insured Federal savings association, or insured 
Federal branch of a foreign bank must provide the Comptroller with 
written notice of:
    (1) Any currently effective order or other action described in 
Sec.  19.243(a)(1)(vi) through (vii) or Sec.  19.244(a)(2) and (3); and
    (2) Any currently effective action by the Public Company Accounting 
Oversight Board under sections 105(c)(4)(C) or (G) of the Sarbanes-
Oxley Act (15 U.S.C. 7215(c)(4)(C) or (G)).
    (c) Timing of notice. Written notice required by this paragraph (c) 
must be given no later than 15 calendar days following the effective 
date of an order or action, or 15 calendar days before an accountant or 
firm accepts an engagement to provide audit services, whichever date is 
earlier.


Sec.  19.246  Petition for reinstatement.

    (a) Form of petition. Unless otherwise ordered by the Comptroller, 
a petition for reinstatement by an independent public accountant, an 
accounting firm, or an office of a firm that was removed, suspended, or 
debarred under Sec.  19.243 may be made in writing at any time. The 
request must contain a concise statement of the action requested. The 
Comptroller may require the applicant to submit additional information.
    (b) Procedure. A petitioner for reinstatement under this section 
may, in the sole discretion of the Comptroller, be afforded a hearing. 
The accountant or firm bears the burden of going forward with a 
petition and proving the grounds asserted in support of the petition. 
In reinstatement proceedings, the person seeking reinstatement bears 
the burden of going forward with an application and proving the grounds 
asserted in support of the application. The Comptroller may, in his 
sole discretion, direct that any reinstatement proceeding be limited to 
written submissions. The removal, suspension, or debarment will 
continue until the Comptroller, for good cause shown, has reinstated 
the petitioner or until the suspension period has expired. The filing 
of a petition for reinstatement will not stay the effectiveness of the 
removal, suspension, or debarment of an accountant or firm.

Subpart Q--Forfeiture of Franchise for Money Laundering or Cash 
Transaction Reporting Offenses


Sec.  19.250  Scope.

    Except as provided in this subpart, subpart A of this part applies 
to proceedings by the Comptroller to determine whether, pursuant to 12 
U.S.C. 93(d) or 12 U.S.C. 1464(w), as applicable, to terminate all 
rights, privileges, and franchises of a national bank, Federal savings 
association, or Federal branch or agency convicted of a criminal 
offense under 18 U.S.C. 1956 or 1957 or 31 U.S.C. 5322 or 5324.


Sec.  19.251  Notice and hearing.

    (a) In general. After receiving written notification from the 
Attorney General of the United States of a conviction of a criminal 
offense under 18 U.S.C. 1956 or 1957, the Comptroller will, or under 31 
U.S.C. 5322 or 5324, the Comptroller may:
    (1) Issue to the national bank, Federal savings association, or 
Federal branch or agency a written notice of the Comptroller's 
intention to terminate all rights, privileges, and franchises of the 
national bank, Federal savings association, or Federal branch or agency 
pursuant to 12 U.S.C. 93(d) or 12 U.S.C. 1464(w); and
    (2) Schedule a pretermination hearing.
    (b) Contents of notice. The notice issued pursuant to paragraph 
(a)(1) of this section must set forth:
    (1) The legal authority for the proceeding and for the OCC's 
jurisdiction over the proceeding;
    (2) The basis of termination pursuant to the factors listed in 
Sec.  19.253;
    (3) A proposed order or prayer for an order of termination;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as established by the 
presiding officer; and
    (6) That the answer must be filed with the OCC.
    (c) Failure to file an answer. Unless the national bank, Federal 
savings association, or Federal branch or agency files an answer within 
the time specified in the notice, it will be deemed to have consented 
to termination of its rights, privileges and franchises and the 
Comptroller may order the termination of such rights, privileges, and 
franchises.
    (d) Service. The OCC will serve the notice upon the national bank, 
Federal savings association, or Federal branch or agency in the manner 
set forth in Sec.  19.11(c).


Sec.  19.252  Presiding officer.

    (a) Appointment. The Comptroller will designate a presiding officer 
to conduct the pretermination hearing under this subpart.
    (b) Powers. The presiding officer has the same powers set forth in 
Sec.  19.5, including the discretion necessary to conduct the 
pretermination hearing in a manner that avoids unnecessary delay. In 
addition, the presiding officer may limit the use of discovery and 
limit opportunities to file written memoranda, briefs, affidavits, or 
other

[[Page 89870]]

materials or documents to avoid relitigation of facts already 
stipulated to by the parties; conceded to by the national bank, Federal 
savings association, or Federal branch or Federal agency; or otherwise 
already firmly established by the underlying criminal conviction.


Sec.  19.253  Grounds for termination.

    In determining whether to terminate a franchise, the Comptroller 
will take into account the following factors:
    (a) The extent to which directors or senior executive officers of 
the national bank, Federal savings association, or Federal branch or 
agency knew of, or were involved in, the commission of the money 
laundering offense of which the national bank, Federal savings 
association, or Federal branch or agency was found guilty;
    (b) The extent to which the offense occurred despite the existence 
of policies and procedures within the national bank, Federal savings 
association, or Federal branch or Federal agency which were designed to 
prevent the occurrence of the offense;
    (c) The extent to which the national bank, Federal savings 
association, or Federal branch or agency has fully cooperated with law 
enforcement authorities with respect to the investigation of the money 
laundering offense of which the national bank, Federal savings 
association, or Federal branch or agency was found guilty;
    (d) The extent to which the national bank, Federal savings 
association, or Federal branch or agency has implemented additional 
internal controls (since the commission of the offense of which the 
national bank, Federal savings association, or Federal branch or agency 
was found guilty) to prevent the occurrence of any money laundering 
offense; and
    (e) The extent to which the interest of the local community in 
having adequate deposit and credit services available would be 
threatened by the forfeiture of the franchise.


 Sec.  19.254  Judicial review.

    Any national bank, Federal savings association, or Federal branch 
or agency of a foreign bank whose rights, privileges and franchises 
have been terminated by order of the Comptroller under this part has 
the right of judicial review of such order pursuant to 12 U.S.C. 
1818(h).

Appendix A to Part 19--Rules of Practice and Procedure

    Note: The content of this appendix reproduces 12 CFR parts 19, 
108, 109, 112, and 165 as of October 1, 2023, which, pursuant to 
Sec.  19.0, are applicable to adjudicatory actions initiated before 
April 1, 2024, unless the parties otherwise stipulate that the rules 
in this part in effect after April 1, 2024 apply. Cross-references 
to parts 19, 108, 109, and 112 (as well as to included sections) in 
this appendix are to those provisions as contained within this 
appendix.

PART 19--RULES OF PRACTICE AND PROCEDURE

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 93a, 164, 
481, 504, 1817, 1818, 1820, 1831m, 1831o, 1832, 1884, 1972, 3102, 
3108(a), 3110, 3909, and 4717; 15 U.S.C. 78(h) and (i), 78o-4(c), 
78o-5, 78q-1, 78s, 78u, 78u-2, 78u-3, 78w, and 1639e; 28 U.S.C. 2461 
note; 31 U.S.C. 330 and 5321; and 42 U.S.C. 4012a.

Subpart A--Uniform Rules of Practice and Procedure


Sec.  19.1  Scope.

    This subpart prescribes Uniform Rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record after opportunity for a hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal 
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the Office of the 
Comptroller of the Currency (``OCC'') should issue an order to approve 
or disapprove a person's proposed acquisition of an institution;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions 
upon any government securities broker or dealer or upon any person 
associated or seeking to become associated with a government securities 
broker or dealer for which the OCC is the appropriate agency;
    (e) Assessment of civil money penalties by the OCC against 
institutions, institution-affiliated parties, and certain other persons 
for which it is the appropriate agency for any violation of:
    (1) Any provision of law referenced in 12 U.S.C. 93, or any 
regulation issued thereunder, and certain unsafe or unsound practices 
and breaches of fiduciary duty, pursuant to 12 U.S.C. 93;
    (2) Sections 22 and 23 of the Federal Reserve Act (``FRA''), or any 
regulation issued thereunder, and certain unsafe or unsound practices 
and breaches of fiduciary duty, pursuant to 12 U.S.C. 504 and 505;
    (3) Section 106(b) of the Bank Holding Company Amendments of 1970, 
pursuant to 12 U.S.C. 1972(2)(F);
    (4) Any provision of the Change in Bank Control Act of 1978 or any 
regulation or order issued thereunder, and certain unsafe or unsound 
practices and breaches of fiduciary duty, pursuant to 12 U.S.C. 
1817(j)(16);
    (5) Any provision of the International Lending Supervision Act of 
1983 (``ILSA''), or any rule, regulation or order issued thereunder, 
pursuant to 12 U.S.C. 3909;
    (6) Any provision of the International Banking Act of 1978 
(``IBA''), or any rule, regulation or order issued thereunder, pursuant 
to 12 U.S.C. 3108;
    (7) Section 5211 of the Revised Statutes (12 U.S.C. 161), pursuant 
to 12 U.S.C. 164;
    (8) Certain provisions of the Exchange Act, pursuant to section 21B 
of the Exchange Act (15 U.S.C. 78u-2);
    (9) Section 1120 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (``FIRREA'') (12 U.S.C. 3349), or any order 
or regulation issued thereunder;
    (10) The terms of any final or temporary order issued under section 
8 of the FDIA or any written agreement executed by the OCC, the terms 
of any condition imposed in writing by the OCC in connection with the 
grant of an application or request, certain unsafe or unsound 
practices, breaches of fiduciary duty, or any law or regulation not 
otherwise provided herein, pursuant to 12 U.S.C. 1818(i)(2);
    (11) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder; and
    (12) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued thereunder;
    (f) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g));
    (g) Removal, prohibition, and civil monetary penalty proceedings 
under section 10(k) of the FDI Act (12 U.S.C. 1820(k)) for violations 
of the post-employment restrictions imposed by that section; and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules.


Sec.  19.2  Rules of construction.

    For purposes of this part:

[[Page 89871]]

    (a) Any term in the singular includes the plural, and the plural 
includes the singular, if such use would be appropriate;
    (b) Any use of a masculine, feminine, or neuter gender encompasses 
all three, if such use would be appropriate;
    (c) The term counsel includes a non-attorney representative; and
    (d) Unless the context requires otherwise, a party's counsel of 
record, if any, may, on behalf of that party, take any action required 
to be taken by the party.


Sec.  19.3  Definitions.

    For purposes of this part, unless explicitly stated to the 
contrary:
    (a) Administrative law judge means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (c) Comptroller means the Comptroller of the Currency or a person 
delegated to perform the functions of the Comptroller of the Currency 
under this part.
    (d) Decisional employee means any member of the Comptroller's or 
administrative law judge's staff who has not engaged in an 
investigative or prosecutorial role in a proceeding and who may assist 
the Comptroller or the administrative law judge, respectively, in 
preparing orders, recommended decisions, decisions, and other documents 
under the Uniform Rules.
    (e) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the OCC in an adjudicatory 
proceeding.
    (f) Final order means an order issued by the Comptroller with or 
without the consent of the affected institution or the institution-
affiliated party, that has become final, without regard to the pendency 
of any petition for reconsideration or review.
    (g) Institution includes any national bank or Federal branch or 
agency of a foreign bank.
    (h) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 3(u) of the FDIA (12 U.S.C. 
1813(u)).
    (i) Local Rules means those rules promulgated by the OCC in the 
subparts of this part excluding subpart A.
    (j) OCC means the Office of the Comptroller of the Currency.
    (k) OFIA means the Office of Financial Institution Adjudication, 
the executive body charged with overseeing the administration of 
administrative enforcement proceedings for the OCC, the Board of 
Governors of the Federal Reserve System (``Board of Governors''), the 
Federal Deposit Insurance Corporation (``FDIC''), the Office of Thrift 
Supervision (``OTS''), and the National Credit Union Administration 
(``NCUA'').
    (l) Party means the OCC and any person named as a party in any 
notice.
    (m) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency or other entity or organization, including an 
institution as defined in paragraph (g) of this section.
    (n) Respondent means any party other than the OCC.
    (o) Uniform Rules means those rules in subpart A of this part that 
are common to the OCC, the Board of Governors, the FDIC, the OTS, and 
the NCUA.
    (p) Violation includes any action (alone or with another or others) 
for or toward causing, bringing about, participating in, counseling, or 
aiding or abetting a violation.


Sec.  19.4  Authority of the Comptroller.

    The Comptroller may, at any time during the pendency of a 
proceeding, perform, direct the performance of, or waive performance 
of, any act which could be done or ordered by the administrative law 
judge.


Sec.  19.5  Authority of the administrative law judge.

    (a) General rule. All proceedings governed by this part shall be 
conducted in accordance with the provisions of chapter 5 of title 5 of 
the United States Code. The administrative law judge shall have all 
powers necessary to conduct a proceeding in a fair and impartial manner 
and to avoid unnecessary delay.
    (b) Powers. The administrative law judge shall have all powers 
necessary to conduct the proceeding in accordance with paragraph (a) of 
this section, including the following powers:
    (1) To administer oaths and affirmations;
    (2) To issue subpoenas, subpoenas duces tecum, and protective 
orders, as authorized by this part, and to quash or modify any such 
subpoenas and orders;
    (3) To receive relevant evidence and to rule upon the admission of 
evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
subpart;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling and/or pre-hearing conferences as set forth 
in Sec.  19.31;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the 
Comptroller shall have the power to grant any motion to dismiss the 
proceeding or to decide any other motion that results in a final 
determination of the merits of the proceeding;
    (8) To prepare and present to the Comptroller a recommended 
decision as provided herein;
    (9) To recuse himself or herself by motion made by a party or on 
his or her own motion;
    (10) To establish time, place and manner limitations on the 
attendance of the public and the media for any public hearing; and
    (11) To do all other things necessary and appropriate to discharge 
the duties of a presiding officer.


Sec.  19.6  Appearance and practice in adjudicatory proceedings.

    (a) Appearance before the OCC or an administrative law judge--(1) 
By attorneys. Any member in good standing of the bar of the highest 
court of any state, commonwealth, possession, territory of the United 
States, or the District of Columbia may represent others before the OCC 
if such attorney is not currently suspended or debarred from practice 
before the OCC.
    (2) By non-attorneys. An individual may appear on his or her own 
behalf; a member of a partnership may represent the partnership; a duly 
authorized officer, director, or employee of any government unit, 
agency, institution, corporation or authority may represent that unit, 
agency, institution, corporation or authority if such officer, 
director, or employee is not currently suspended or debarred from 
practice before the OCC.
    (3) Notice of appearance. Any individual acting as counsel on 
behalf of a party, including the Comptroller, shall file a notice of 
appearance with OFIA at or before the time that the individual submits 
papers or otherwise appears on behalf of a party in the adjudicatory 
proceeding. The notice of appearance must include a written declaration 
that the individual is currently qualified as provided in paragraph 
(a)(1) or (a)(2) of this section and is authorized to represent the 
particular party. By filing a notice of appearance on behalf of a party 
in an adjudicatory proceeding, the counsel agrees and represents that 
he or she is authorized to accept service on behalf of the represented 
party and that, in the event of withdrawal from representation, he or 
she will, if required by the administrative law

[[Page 89872]]

judge, continue to accept service until new counsel has filed a notice 
of appearance or until the represented party indicates that he or she 
will proceed on a pro se basis.
    (b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or 
contumacious conduct at any phase of any adjudicatory proceeding may be 
grounds for exclusion or suspension of counsel from the proceeding.


Sec.  19.7  Good faith certification.

    (a) General requirement. Every filing or submission of record 
following the issuance of a notice shall be signed by at least one 
counsel of record in his or her individual name and shall state that 
counsel's address and telephone number. A party who acts as his or her 
own counsel shall sign his or her individual name and state his or her 
address and telephone number on every filing or submission of record.
    (b) Effect of signature. (1) The signature of counsel or a party 
shall constitute a certification that: the counsel or party has read 
the filing or submission of record; to the best of his or her 
knowledge, information, and belief formed after reasonable inquiry, the 
filing or submission of record is well-grounded in fact and is 
warranted by existing law or a good faith argument for the extension, 
modification, or reversal of existing law; and the filing or submission 
of record is not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.
    (2) If a filing or submission of record is not signed, the 
administrative law judge shall strike the filing or submission of 
record, unless it is signed promptly after the omission is called to 
the attention of the pleader or movant.
    (c) Effect of making oral motion or argument. The act of making any 
oral motion or oral argument by any counsel or party constitutes a 
certification that to the best of his or her knowledge, information, 
and belief formed after reasonable inquiry, his or her statements are 
well-grounded in fact and are warranted by existing law or a good faith 
argument for the extension, modification, or reversal of existing law, 
and are not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.


Sec.  19.8  Conflicts of interest.

    (a) Conflict of interest in representation. No person shall appear 
as counsel for another person in an adjudicatory proceeding if it 
reasonably appears that such representation may be materially limited 
by that counsel's responsibilities to a third person or by the 
counsel's own interests. The administrative law judge may take 
corrective measures at any stage of a proceeding to cure a conflict of 
interest in representation, including the issuance of an order limiting 
the scope of representation or disqualifying an individual from 
appearing in a representative capacity for the duration of the 
proceeding.
    (b) Certification and waiver. If any person appearing as counsel 
represents two or more parties to an adjudicatory proceeding or also 
represents a non-party on a matter relevant to an issue in the 
proceeding, counsel must certify in writing at the time of filing the 
notice of appearance required by Sec.  19.6(a):
    (1) That the counsel has personally and fully discussed the 
possibility of conflicts of interest with each such party and non-
party; and
    (2) That each such party and non-party waives any right it might 
otherwise have had to assert any known conflicts of interest or to 
assert any non-material conflicts of interest during the course of the 
proceeding.


Sec.  19.9  Ex parte communications.

    (a) Definition--(1) Ex parte communication means any material oral 
or written communication relevant to the merits of an adjudicatory 
proceeding that was neither on the record nor on reasonable prior 
notice to all parties that takes place between:
    (i) An interested person outside the OCC (including such person's 
counsel); and
    (ii) The administrative law judge handling that proceeding, the 
Comptroller, or a decisional employee.
    (2) Exception. A request for status of the proceeding does not 
constitute an ex parte communication.
    (b) Prohibition of ex parte communications. From the time the 
notice is issued by the Comptroller until the date that the Comptroller 
issues his or her final decision pursuant to Sec.  19.40(c):
    (1) No interested person outside the OCC shall make or knowingly 
cause to be made an ex parte communication to the Comptroller, the 
administrative law judge, or a decisional employee; and
    (2) The Comptroller, administrative law judge, or decisional 
employee shall not make or knowingly cause to be made to any interested 
person outside the OCC any ex parte communication.
    (c) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the administrative law judge, the 
Comptroller or any other person identified in paragraph (a) of this 
section, that person shall cause all such written communications (or, 
if the communication is oral, a memorandum stating the substance of the 
communication) to be placed on the record of the proceeding and served 
on all parties. All other parties to the proceeding shall have an 
opportunity, within ten days of receipt of service of the ex parte 
communication, to file responses thereto and to recommend any 
sanctions, in accordance with paragraph (d) of this section, that they 
believe to be appropriate under the circumstances.
    (d) Sanctions. Any party or his or her counsel who makes a 
prohibited ex parte communication, or who encourages or solicits 
another to make any such communication, may be subject to any 
appropriate sanction or sanctions imposed by the Comptroller or the 
administrative law judge including, but not limited to, exclusion from 
the proceedings and an adverse ruling on the issue which is the subject 
of the prohibited communication.
    (e) Separation of functions. Except to the extent required for the 
disposition of ex parte matters as authorized by law, the 
administrative law judge may not consult a person or party on any 
matter relevant to the merits of the adjudication, unless on notice and 
opportunity for all parties to participate. An employee or agent 
engaged in the performance of investigative or prosecuting functions 
for the OCC in a case may not, in that or a factually related case, 
participate or advise in the decision, recommended decision, or agency 
review of the recommended decision under Sec.  19.40, except as witness 
or counsel in public proceedings.


Sec.  19.10  Filing of papers.

    (a) Filing. Any papers required to be filed, excluding documents 
produced in response to a discovery request pursuant to Sec. Sec.  
19.25 and 19.26, shall be filed with OFIA, except as otherwise 
provided.
    (b) Manner of filing. Unless otherwise specified by the Comptroller 
or the administrative law judge, filing may be accomplished by:
    (1) Personal service;
    (2) Delivering the papers to a reliable commercial courier service, 
overnight delivery service, or to the U.S. Post Office for Express Mail 
delivery;
    (3) Mailing the papers by first class, registered, or certified 
mail; or
    (4) Transmission by electronic media, only if expressly authorized, 
and upon any conditions specified, by the Comptroller or the 
administrative law

[[Page 89873]]

judge. All papers filed by electronic media shall also concurrently be 
filed in accordance with paragraph (c) of this section.
    (c) Formal requirements as to papers filed--(1) Form. All papers 
filed must set forth the name, address, and telephone number of the 
counsel or party making the filing and must be accompanied by a 
certification setting forth when and how service has been made on all 
other parties. All papers filed must be double-spaced and printed or 
typewritten on 8\1/2\ x 11 inch paper, and must be clear and legible.
    (2) Signature. All papers must be dated and signed as provided in 
Sec.  19.7.
    (3) Caption. All papers filed must include at the head thereof, or 
on a title page, the name of the OCC and of the filing party, the title 
and docket number of the proceeding, and the subject of the particular 
paper.
    (4) Number of copies. Unless otherwise specified by the Comptroller 
or the administrative law judge, an original and one copy of all 
documents and papers shall be filed, except that only one copy of 
transcripts of testimony and exhibits shall be filed.


Sec.  19.11  Service of papers.

    (a) By the parties. Except as otherwise provided, a party filing 
papers shall serve a copy upon the counsel of record for all other 
parties to the proceeding so represented, and upon any party not so 
represented.
    (b) Method of service. Except as provided in paragraphs (c)(2) and 
(d) of this section, a serving party shall use one or more of the 
following methods of service:
    (1) Personal service;
    (2) Delivering the papers to a reliable commercial courier service, 
overnight delivery service, or to the U.S. Post Office for Express Mail 
delivery;
    (3) Mailing the papers by first class, registered, or certified 
mail; or
    (4) Transmission by electronic media, only if the parties mutually 
agree. Any papers served by electronic media shall also concurrently be 
served in accordance with the requirements of Sec.  19.10(c).
    (c) By the Comptroller or the administrative law judge. (1) All 
papers required to be served by the Comptroller or the administrative 
law judge upon a party who has appeared in the proceeding in accordance 
with Sec.  19.6 shall be served by any means specified in paragraph (b) 
of this section.
    (2) If a party has not appeared in the proceeding in accordance 
with Sec.  19.6, the Comptroller or the administrative law judge shall 
make service by any of the following methods:
    (i) By personal service;
    (ii) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (iii) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
party;
    (iv) By registered or certified mail addressed to the person's last 
known address; or
    (v) By any other method reasonably calculated to give actual 
notice.
    (d) Subpoenas. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (3) By delivery to an agent, which, in the case of a corporation or 
other association, is delivery to an officer, managing or general 
agent, or to any other agent authorized by appointment or by law to 
receive service and, if the agent is one authorized by statute to 
receive service and the statute so requires, by also mailing a copy to 
the party;
    (4) By registered or certified mail addressed to the person's last 
known address; or
    (5) By any other method reasonably calculated to give actual 
notice.
    (e) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing is held, provided that if service is made on a 
foreign bank in connection with an action or proceeding involving one 
or more of its branches or agencies located in any state, territory, 
possession of the United States, or the District of Columbia, service 
shall be made on at least one branch or agency so involved.


Sec.  19.12  Construction of time limits.

    (a) General rule. In computing any period of time prescribed by 
this subpart, the date of the act or event that commences the 
designated period of time is not included. The last day so computed is 
included unless it is a Saturday, Sunday, or Federal holiday. When the 
last day is a Saturday, Sunday, or Federal holiday, the period runs 
until the end of the next day that is not a Saturday, Sunday, or 
Federal holiday. Intermediate Saturdays, Sundays, and Federal holidays 
are included in the computation of time. However, when the time period 
within which an act is to be performed is ten days or less, not 
including any additional time allowed for in paragraph (c) of this 
section, intermediate Saturdays, Sundays, and Federal holidays are not 
included.
    (b) When papers are deemed to be filed or served. (1) Filing and 
service are deemed to be effective:
    (i) In the case of personal service or same day commercial courier 
delivery, upon actual service;
    (ii) In the case of overnight commercial delivery service, U.S. 
Express Mail delivery, or first class, registered, or certified mail, 
upon deposit in or delivery to an appropriate point of collection;
    (iii) In the case of transmission by electronic media, as specified 
by the authority receiving the filing, in the case of filing, and as 
agreed among the parties, in the case of service.
    (2) The effective filing and service dates specified in paragraph 
(b)(1) of this section may be modified by the Comptroller or 
administrative law judge in the case of filing or by agreement of the 
parties in the case of service.
    (c) Calculation of time for service and filing of responsive 
papers. Whenever a time limit is measured by a prescribed period from 
the service of any notice or paper, the applicable time limits are 
calculated as follows:
    (1) If service is made by first class, registered, or certified 
mail, add three calendar days to the prescribed period;
    (2) If service is made by express mail or overnight delivery 
service, add one calendar day to the prescribed period; or
    (3) If service is made by electronic media transmission, add one 
calendar day to the prescribed period, unless otherwise determined by 
the Comptroller or the administrative law judge in the case of filing, 
or by agreement among the parties in the case of service.


Sec.  19.13  Change of time limits.

    Except as otherwise provided by law, the administrative law judge 
may, for good cause shown, extend the time limits prescribed by the 
Uniform Rules or by any notice or order issued in the proceedings. 
After the referral of the case to the Comptroller pursuant to Sec.  
19.38, the Comptroller may grant extensions of the time limits for good

[[Page 89874]]

cause shown. Extensions may be granted at the motion of a party after 
notice and opportunity to respond is afforded all non-moving parties or 
on the Comptroller's or the administrative law judge's own motion.


Sec.  19.14  Witness fees and expenses.

    Witnesses subpoenaed for testimony or depositions shall be paid the 
same fees for attendance and mileage as are paid in the United States 
district courts in proceedings in which the United States is a party, 
provided that, in the case of a discovery subpoena addressed to a 
party, no witness fees or mileage need be paid. Fees for witnesses 
shall be tendered in advance by the party requesting the subpoena, 
except that fees and mileage need not be tendered in advance where the 
OCC is the party requesting the subpoena. The OCC shall not be required 
to pay any fees to, or expenses of, any witness not subpoenaed by the 
OCC.


Sec.  19.15  Opportunity for informal settlement.

    Any respondent may, at any time in the proceeding, unilaterally 
submit to Enforcement Counsel written offers or proposals for 
settlement of a proceeding, without prejudice to the rights of any of 
the parties. No such offer or proposal shall be made to any OCC 
representative other than Enforcement Counsel. Submission of a written 
settlement offer does not provide a basis for adjourning or otherwise 
delaying all or any portion of a proceeding under this part. No 
settlement offer or proposal, or any subsequent negotiation or 
resolution, is admissible as evidence in any proceeding.


Sec.  19.16  OCC's right to conduct examination.

    Nothing contained in this subpart limits in any manner the right of 
the OCC to conduct any examination, inspection, or visitation of any 
institution or institution-affiliated party, or the right of the OCC to 
conduct or continue any form of investigation authorized by law.


Sec.  19.17  Collateral attacks on adjudicatory proceeding.

    If an interlocutory appeal or collateral attack is brought in any 
court concerning all or any part of an adjudicatory proceeding, the 
challenged adjudicatory proceeding shall continue without regard to the 
pendency of that court proceeding. No default or other failure to act 
as directed in the adjudicatory proceeding within the times prescribed 
in this subpart shall be excused based on the pendency before any court 
of any interlocutory appeal or collateral attack.


Sec.  19.18  Commencement of proceeding and contents of notice.

    (a) Commencement of proceeding. (1)(i) Except for change-in-control 
proceedings under section 7(j)(4) of the FDIA, 12 U.S.C. 1817(j)(4), a 
proceeding governed by this subpart is commenced by issuance of a 
notice by the Comptroller.
    (ii) The notice must be served by the Comptroller upon the 
respondent and given to any other appropriate financial institution 
supervisory authority where required by law.
    (iii) The notice must be filed with OFIA.
    (2) Change-in control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the 
Comptroller.
    (b) Contents of notice. The notice must set forth:
    (1) The legal authority for the proceeding and for the OCC's 
jurisdiction over the proceeding;
    (2) A statement of the matters of fact or law showing that the OCC 
is entitled to relief;
    (3) A proposed order or prayer for an order granting the requested 
relief;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as required by law or 
regulation;
    (6) The time within which to request a hearing as required by law 
or regulation; and
    (7) That the answer and/or request for a hearing shall be filed 
with OFIA.


Sec.  19.19  Answer.

    (a) When. Within 20 days of service of the notice, respondent shall 
file an answer as designated in the notice. In a civil money penalty 
proceeding, respondent shall also file a request for a hearing within 
20 days of service of the notice.
    (b) Content of answer. An answer must specifically respond to each 
paragraph or allegation of fact contained in the notice and must admit, 
deny, or state that the party lacks sufficient information to admit or 
deny each allegation of fact. A statement of lack of information has 
the effect of a denial. Denials must fairly meet the substance of each 
allegation of fact denied; general denials are not permitted. When a 
respondent denies part of an allegation, that part must be denied and 
the remainder specifically admitted. Any allegation of fact in the 
notice which is not denied in the answer must be deemed admitted for 
purposes of the proceeding. A respondent is not required to respond to 
the portion of a notice that constitutes the prayer for relief or 
proposed order. The answer must set forth affirmative defenses, if any, 
asserted by the respondent.
    (c) Default--(1) Effect of failure to answer. Failure of a 
respondent to file an answer required by this section within the time 
provided constitutes a waiver of his or her right to appear and contest 
the allegations in the notice. If no timely answer is filed, 
Enforcement Counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the administrative law judge shall file with the 
Comptroller a recommended decision containing the findings and the 
relief sought in the notice. Any final order issued by the Comptroller 
based upon a respondent's failure to answer is deemed to be an order 
issued upon consent.
    (2) Effect of failure to request a hearing in civil money penalty 
proceedings. If respondent fails to request a hearing as required by 
law within the time provided, the notice of assessment constitutes a 
final and unappealable order.


Sec.  19.20  Amended pleadings.

    (a) Amendments. The notice or answer may be amended or supplemented 
at any stage of the proceeding. The respondent must answer an amended 
notice within the time remaining for the respondent's answer to the 
original notice, or within ten days after service of the amended 
notice, whichever period is longer, unless the Comptroller or 
administrative law judge orders otherwise for good cause.
    (b) Amendments to conform to the evidence. When issues not raised 
in the notice or answer are tried at the hearing by express or implied 
consent of the parties, they will be treated in all respects as if they 
had been raised in the notice or answer, and no formal amendments are 
required. If evidence is objected to at the hearing on the ground that 
it is not within the issues raised by the notice or answer, the 
administrative law judge may admit the evidence when admission is 
likely to assist in adjudicating the merits of the action and the 
objecting party fails to satisfy the administrative law judge that the 
admission of such evidence would unfairly prejudice that party's action 
or defense upon the merits. The administrative law judge may grant a 
continuance to enable the objecting party to meet such evidence.

[[Page 89875]]

Sec.  19.21  Failure to appear.

    Failure of a respondent to appear in person at the hearing or by a 
duly authorized counsel constitutes a waiver of respondent's right to a 
hearing and is deemed an admission of the facts as alleged and consent 
to the relief sought in the notice. Without further proceedings or 
notice to the respondent, the administrative law judge shall file with 
the Comptroller a recommended decision containing the findings and the 
relief sought in the notice.


Sec.  19.22  Consolidation and severance of actions.

    (a) Consolidation. (1) On the motion of any party, or on the 
administrative law judge's own motion, the administrative law judge may 
consolidate, for some or all purposes, any two or more proceedings, if 
each such proceeding involves or arises out of the same transaction, 
occurrence or series of transactions or occurrences, or involves at 
least one common respondent or a material common question of law or 
fact, unless such consolidation would cause unreasonable delay or 
injustice.
    (2) In the event of consolidation under paragraph (a)(1) of this 
section, appropriate adjustment to the prehearing schedule must be made 
to avoid unnecessary expense, inconvenience, or delay.
    (b) Severance. The administrative law judge may, upon the motion of 
any party, sever the proceeding for separate resolution of the matter 
as to any respondent only if the administrative law judge finds that:
    (1) Undue prejudice or injustice to the moving party would result 
from not severing the proceeding; and
    (2) Such undue prejudice or injustice would outweigh the interests 
of judicial economy and expedition in the complete and final resolution 
of the proceeding.


Sec.  19.23  Motions.

    (a) In writing. (1) Except as otherwise provided herein, an 
application or request for an order or ruling must be made by written 
motion.
    (2) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.
    (3) No oral argument may be held on written motions except as 
otherwise directed by the administrative law judge. Written memoranda, 
briefs, affidavits or other relevant material or documents may be filed 
in support of or in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the administrative law judge directs that such motion be reduced to 
writing.
    (c) Filing of motions. Motions must be filed with the 
administrative law judge, except that following the filing of the 
recommended decision, motions must be filed with the Comptroller.
    (d) Responses. (1) Except as otherwise provided herein, within ten 
days after service of any written motion, or within such other period 
of time as may be established by the administrative law judge or the 
Comptroller, any party may file a written response to a motion. The 
administrative law judge shall not rule on any oral or written motion 
before each party has had an opportunity to file a response.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed a consent by that party to the 
entry of an order substantially in the form of the order accompanying 
the motion.
    (e) Dilatory motions. Frivolous, dilatory or repetitive motions are 
prohibited. The filing of such motions may form the basis for 
sanctions.
    (f) Dispositive motions. Dispositive motions are governed by 
Sec. Sec.  19.29 and 19.30.


Sec.  19.24  Scope of document discovery.

    (a) Limits on discovery. (1) Subject to the limitations set out in 
paragraphs (b), (c), and (d) of this section, a party to a proceeding 
under this subpart may obtain document discovery by serving a written 
request to produce documents. For purposes of a request to produce 
documents, the term ``documents'' may be defined to include drawings, 
graphs, charts, photographs, recordings, data stored in electronic 
form, and other data compilations from which information can be 
obtained, or translated, if necessary, by the parties through detection 
devices into reasonably usable form, as well as written material of all 
kinds.
    (2) Discovery by use of deposition is governed by subpart I of this 
part.
    (3) Discovery by use of interrogatories is not permitted.
    (b) Relevance. A party may obtain document discovery regarding any 
matter, not privileged, that has material relevance to the merits of 
the pending action. Any request to produce documents that calls for 
irrelevant material, that is unreasonable, oppressive, excessive in 
scope, unduly burdensome, or repetitive of previous requests, or that 
seeks to obtain privileged documents will be denied or modified. A 
request is unreasonable, oppressive, excessive in scope, or unduly 
burdensome if, among other things, it fails to include justifiable 
limitations on the time period covered and the geographic locations to 
be searched, the time provided to respond in the request is inadequate, 
or the request calls for copies of documents to be delivered to the 
requesting party and fails to include the requestor's written agreement 
to pay in advance for the copying, in accordance with Sec.  19.25.
    (c) Privileged matter. Privileged documents are not discoverable. 
Privileges include the attorney-client privilege, work-product 
privilege, any government's or government agency's deliberative process 
privilege, and any other privileges the Constitution, any applicable 
act of Congress, or the principles of common law provide.
    (d) Time limits. All discovery, including all responses to 
discovery requests, shall be completed at least 20 days prior to the 
date scheduled for the commencement of the hearing, except as provided 
in the Local Rules. No exceptions to this time limit shall be 
permitted, unless the administrative law judge finds on the record that 
good cause exists for waiving the requirements of this paragraph.


Sec.  19.25  Request for document discovery from parties.

    (a) General rule. Any party may serve on any other party a request 
to produce for inspection any discoverable documents that are in the 
possession, custody, or control of the party upon whom the request is 
served. The request must identify the documents to be produced either 
by individual item or by category, and must describe each item and 
category with reasonable particularity. Documents must be produced as 
they are kept in the usual course of business or must be organized to 
correspond with the categories in the request.
    (b) Production or copying. The request must specify a reasonable 
time, place, and manner for production and performing any related acts. 
In lieu of inspecting the documents, the requesting party may specify 
that all or some of the responsive documents be copied and the copies 
delivered to the requesting party. If copying of fewer than 250 pages 
is requested, the party to whom the request is addressed shall bear the 
cost of copying and shipping charges. If a party requests 250 pages or 
more of copying, the requesting party shall pay for the copying and 
shipping charges. Copying charges are the current per-page copying rate 
imposed by 12 CFR part 4 implementing the Freedom of Information Act (5 
U.S.C. 552). The party to whom the request is addressed may require 
payment in advance before producing the documents.

[[Page 89876]]

    (c) Obligation to update responses. A party who has responded to a 
discovery request with a response that was complete when made is not 
required to supplement the response to include documents thereafter 
acquired, unless the responding party learns that:
    (1) The response was materially incorrect when made; or
    (2) The response, though correct when made, is no longer true and a 
failure to amend the response is, in substance, a knowing concealment.
    (d) Motions to limit discovery. (1) Any party that objects to a 
discovery request may, within ten days of being served with such 
request, file a motion in accordance with the provisions of Sec.  19.23 
to strike or otherwise limit the request. If an objection is made to 
only a portion of an item or category in a request, the portion 
objected to shall be specified. Any objections not made in accordance 
with this paragraph and Sec.  19.23 are waived.
    (2) The party who served the request that is the subject of a 
motion to strike or limit may file a written response within five days 
of service of the motion. No other party may file a response.
    (e) Privilege. At the time other documents are produced, the 
producing party must reasonably identify all documents withheld on the 
grounds of privilege and must produce a statement of the basis for the 
assertion of privilege. When similar documents that are protected by 
deliberative process, attorney work-product, or attorney-client 
privilege are voluminous, these documents may be identified by category 
instead of by individual document. The administrative law judge retains 
discretion to determine when the identification by category is 
insufficient.
    (f) Motions to compel production. (1) If a party withholds any 
documents as privileged or fails to comply fully with a discovery 
request, the requesting party may, within ten days of the assertion of 
privilege or of the time the failure to comply becomes known to the 
requesting party, file a motion in accordance with the provisions of 
Sec.  19.23 for the issuance of a subpoena compelling production.
    (2) The party who asserted the privilege or failed to comply with 
the request may file a written response to a motion to compel within 
five days of service of the motion. No other party may file a response.
    (g) Ruling on motions. After the time for filing responses pursuant 
to this section has expired, the administrative law judge shall rule 
promptly on all motions filed pursuant to this section. If the 
administrative law judge determines that a discovery request, or any of 
its terms, calls for irrelevant material, is unreasonable, oppressive, 
excessive in scope, unduly burdensome, or repetitive of previous 
requests, or seeks to obtain privileged documents, he or she may deny 
or modify the request, and may issue appropriate protective orders, 
upon such conditions as justice may require. The pendency of a motion 
to strike or limit discovery or to compel production is not a basis for 
staying or continuing the proceeding, unless otherwise ordered by the 
administrative law judge. Notwithstanding any other provision in this 
part, the administrative law judge may not release, or order a party to 
produce, documents withheld on grounds of privilege if the party has 
stated to the administrative law judge its intention to file a timely 
motion for interlocutory review of the administrative law judge's order 
to produce the documents, and until the motion for interlocutory review 
has been decided.
    (h) Enforcing discovery subpoenas. If the administrative law judge 
issues a subpoena compelling production of documents by a party, the 
subpoenaing party may, in the event of noncompliance and to the extent 
authorized by applicable law, apply to any appropriate United States 
district court for an order requiring compliance with the subpoena. A 
party's right to seek court enforcement of a subpoena shall not in any 
manner limit the sanctions that may be imposed by the administrative 
law judge against a party who fails to produce subpoenaed documents.


Sec.  19.26  Document subpoenas to nonparties.

    (a) General rules. (1) Any party may apply to the administrative 
law judge for the issuance of a document discovery subpoena addressed 
to any person who is not a party to the proceeding. The application 
must contain a proposed document subpoena and a brief statement showing 
the general relevance and reasonableness of the scope of documents 
sought. The subpoenaing party shall specify a reasonable time, place, 
and manner for making production in response to the document subpoena.
    (2) A party shall only apply for a document subpoena under this 
section within the time period during which such party could serve a 
discovery request under Sec.  19.24(d). The party obtaining the 
document subpoena is responsible for serving it on the subpoenaed 
person and for serving copies on all parties. Document subpoenas may be 
served in any state, territory, or possession of the United States, the 
District of Columbia, or as otherwise provided by law.
    (3) The administrative law judge shall promptly issue any document 
subpoena requested pursuant to this section. If the administrative law 
judge determines that the application does not set forth a valid basis 
for the issuance of the subpoena, or that any of its terms are 
unreasonable, oppressive, excessive in scope, or unduly burdensome, he 
or she may refuse to issue the subpoena or may issue it in a modified 
form upon such conditions as may be consistent with the Uniform Rules.
    (b) Motion to quash or modify. (1) Any person to whom a document 
subpoena is directed may file a motion to quash or modify such 
subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant shall serve the motion on all 
parties, and any party may respond to such motion within ten days of 
service of the motion.
    (2) Any motion to quash or modify a document subpoena must be filed 
on the same basis, including the assertion of privilege, upon which a 
party could object to a discovery request under Sec.  19.25(d), and 
during the same time limits during which such an objection could be 
filed.
    (c) Enforcing document subpoenas. If a subpoenaed person fails to 
comply with any subpoena issued pursuant to this section or any order 
of the administrative law judge which directs compliance with all or 
any portion of a document subpoena, the subpoenaing party or any other 
aggrieved party may, to the extent authorized by applicable law, apply 
to an appropriate United States district court for an order requiring 
compliance with so much of the document subpoena as the administrative 
law judge has not quashed or modified. A party's right to seek court 
enforcement of a document subpoena shall in no way limit the sanctions 
that may be imposed by the administrative law judge on a party who 
induces a failure to comply with subpoenas issued under this section.


Sec.  19.27  Deposition of witness unavailable for hearing.

    (a) General rules. (1) If a witness will not be available for the 
hearing, a party desiring to preserve that witness' testimony for the 
record may apply in accordance with the procedures set forth in 
paragraph (a)(2) of this section, to the administrative law judge for 
the issuance of a subpoena, including a subpoena duces tecum, requiring 
the attendance of the witness at a deposition. The administrative law

[[Page 89877]]

judge may issue a deposition subpoena under this section upon showing 
that:
    (i) The witness will be unable to attend or may be prevented from 
attending the hearing because of age, sickness or infirmity, or will 
otherwise be unavailable;
    (ii) The witness' unavailability was not procured or caused by the 
subpoenaing party;
    (iii) The testimony is reasonably expected to be material; and
    (iv) Taking the deposition will not result in any undue burden to 
any other party and will not cause undue delay of the proceeding.
    (2) The application must contain a proposed deposition subpoena and 
a brief statement of the reasons for the issuance of the subpoena. The 
subpoena must name the witness whose deposition is to be taken and 
specify the time and place for taking the deposition. A deposition 
subpoena may require the witness to be deposed at any place within the 
country in which that witness resides or has a regular place of 
employment or such other convenient place as the administrative law 
judge shall fix.
    (3) Any requested subpoena that sets forth a valid basis for its 
issuance must be promptly issued, unless the administrative law judge 
on his or her own motion, requires a written response or requires 
attendance at a conference concerning whether the requested subpoena 
should be issued.
    (4) The party obtaining a deposition subpoena is responsible for 
serving it on the witness and for serving copies on all parties. Unless 
the administrative law judge orders otherwise, no deposition under this 
section shall be taken on fewer than ten days' notice to the witness 
and all parties. Deposition subpoenas may be served in any state, 
territory, possession of the United States, or the District of 
Columbia, on any person or company doing business in any state, 
territory, possession of the United States, or the District of 
Columbia, or as otherwise permitted by law.
    (b) Objections to deposition subpoenas. (1) The witness and any 
party who has not had an opportunity to oppose a deposition subpoena 
issued under this section may file a motion with the administrative law 
judge to quash or modify the subpoena prior to the time for compliance 
specified in the subpoena, but not more than ten days after service of 
the subpoena.
    (2) A statement of the basis for the motion to quash or modify a 
subpoena issued under this section must accompany the motion. The 
motion must be served on all parties.
    (c) Procedure upon deposition. (1) Each witness testifying pursuant 
to a deposition subpoena must be duly sworn, and each party shall have 
the right to examine the witness. Objections to questions or documents 
must be in short form, stating the grounds for the objection. Failure 
to object to questions or documents is not deemed a waiver except where 
the ground for the objection might have been avoided if the objection 
had been timely presented. All questions, answers, and objections must 
be recorded.
    (2) Any party may move before the administrative law judge for an 
order compelling the witness to answer any questions the witness has 
refused to answer or submit any evidence the witness has refused to 
submit during the deposition.
    (3) The deposition must be subscribed by the witness, unless the 
parties and the witness, by stipulation, have waived the signing, or 
the witness is ill, cannot be found, or has refused to sign. If the 
deposition is not subscribed by the witness, the court reporter taking 
the deposition shall certify that the transcript is a true and complete 
transcript of the deposition.
    (d) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any order of the administrative law judge which directs compliance 
with all or any portion of a deposition subpoena under paragraph (b) or 
(c)(3) of this section, the subpoenaing party or other aggrieved party 
may, to the extent authorized by applicable law, apply to an 
appropriate United States district court for an order requiring 
compliance with the portions of the subpoena that the administrative 
law judge has ordered enforced. A party's right to seek court 
enforcement of a deposition subpoena in no way limits the sanctions 
that may be imposed by the administrative law judge on a party who 
fails to comply with, or procures a failure to comply with, a subpoena 
issued under this section.


Sec.  19.28  Interlocutory review.

    (a) General rule. The Comptroller may review a ruling of the 
administrative law judge prior to the certification of the record to 
the Comptroller only in accordance with the procedures set forth in 
this section and Sec.  19.23.
    (b) Scope of review. The Comptroller may exercise interlocutory 
review of a ruling of the administrative law judge if the Comptroller 
finds that:
    (1) The ruling involves a controlling question of law or policy as 
to which substantial grounds exist for a difference of opinion;
    (2) Immediate review of the ruling may materially advance the 
ultimate termination of the proceeding;
    (3) Subsequent modification of the ruling at the conclusion of the 
proceeding would be an inadequate remedy; or
    (4) Subsequent modification of the ruling would cause unusual delay 
or expense.
    (c) Procedure. Any request for interlocutory review shall be filed 
by a party with the administrative law judge within ten days of his or 
her ruling and shall otherwise comply with Sec.  19.23. Any party may 
file a response to a request for interlocutory review in accordance 
with Sec.  19.23(d). Upon the expiration of the time for filing all 
responses, the administrative law judge shall refer the matter to the 
Comptroller for final disposition.
    (d) Suspension of proceeding. Neither a request for interlocutory 
review nor any disposition of such a request by the Comptroller under 
this section suspends or stays the proceeding unless otherwise ordered 
by the administrative law judge or the Comptroller.


Sec.  19.29  Summary disposition.

    (a) In general. The administrative law judge shall recommend that 
the Comptroller issue a final order granting a motion for summary 
disposition if the undisputed pleaded facts, admissions, affidavits, 
stipulations, documentary evidence, matters as to which official notice 
may be taken, and any other evidentiary materials properly submitted in 
connection with a motion for summary disposition show that:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.
    (b) Filing of motions and responses. (1) Any party who believes 
there is no genuine issue of material fact to be determined and that he 
or she is entitled to a decision as a matter of law may move at any 
time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 days after service of such a motion, 
or within such time period as allowed by the administrative law judge, 
may file a response to such motion.
    (2) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, investigatory depositions, transcripts, 
affidavits and any other evidentiary materials that the moving party

[[Page 89878]]

contends support his or her position. The motion must also be 
accompanied by a brief containing the points and authorities in support 
of the contention of the moving party. Any party opposing a motion for 
summary disposition must file a statement setting forth those material 
facts as to which he or she contends a genuine dispute exists. Such 
opposition must be supported by evidence of the same type as that 
submitted with the motion for summary disposition and a brief 
containing the points and authorities in support of the contention that 
summary disposition would be inappropriate.
    (c) Hearing on motion. At the request of any party or on his or her 
own motion, the administrative law judge may hear oral argument on the 
motion for summary disposition.
    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the administrative law judge 
shall determine whether the moving party is entitled to summary 
disposition. If the administrative law judge determines that summary 
disposition is warranted, the administrative law judge shall submit a 
recommended decision to that effect to the Comptroller. If the 
administrative law judge finds that no party is entitled to summary 
disposition, he or she shall make a ruling denying the motion.


Sec.  19.30  Partial summary disposition.

    If the administrative law judge determines that a party is entitled 
to summary disposition as to certain claims only, he or she shall defer 
submitting a recommended decision as to those claims. A hearing on the 
remaining issues must be ordered. Those claims for which the 
administrative law judge has determined that summary disposition is 
warranted will be addressed in the recommended decision filed at the 
conclusion of the hearing.


Sec.  19.31  Scheduling and prehearing conferences.

    (a) Scheduling conference. Within 30 days of service of the notice 
or order commencing a proceeding or such other time as parties may 
agree, the administrative law judge shall direct counsel for all 
parties to meet with him or her in person at a specified time and place 
prior to the hearing or to confer by telephone for the purpose of 
scheduling the course and conduct of the proceeding. This meeting or 
telephone conference is called a ``scheduling conference.'' The 
identification of potential witnesses, the time for and manner of 
discovery, and the exchange of any prehearing materials including 
witness lists, statements of issues, stipulations, exhibits and any 
other materials may also be determined at the scheduling conference.
    (b) Prehearing conferences. The administrative law judge may, in 
addition to the scheduling conference, on his or her own motion or at 
the request of any party, direct counsel for the parties to meet with 
him or her (in person or by telephone) at a prehearing conference to 
address any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, 
authenticity and admissibility into evidence of documents;
    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes;
    (7) Amendments to pleadings; and
    (8) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (c) Transcript. The administrative law judge, in his or her 
discretion, may require that a scheduling or prehearing conference be 
recorded by a court reporter. A transcript of the conference and any 
materials filed, including orders, becomes part of the record of the 
proceeding. A party may obtain a copy of the transcript at his or her 
expense.
    (d) Scheduling or prehearing orders. At or within a reasonable time 
following the conclusion of the scheduling conference or any prehearing 
conference, the administrative law judge shall serve on each party an 
order setting forth any agreements reached and any procedural 
determinations made.


Sec.  19.32  Prehearing submissions.

    (a) Within the time set by the administrative law judge, but in no 
case later than 14 days before the start of the hearing, each party 
shall serve on every other party, his or her:
    (1) Prehearing statement;
    (2) Final list of witnesses to be called to testify at the hearing, 
including name and address of each witness and a short summary of the 
expected testimony of each witness;
    (3) List of the exhibits to be introduced at the hearing along with 
a copy of each exhibit; and
    (4) Stipulations of fact, if any.
    (b) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraph (a) of 
this section, except for good cause shown.


Sec.  19.33  Public hearings.

    (a) General rule. All hearings shall be open to the public, unless 
the Comptroller, in the Comptroller's discretion, determines that 
holding an open hearing would be contrary to the public interest. 
Within 20 days of service of the notice or, in the case of change-in-
control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 
1817(j)(4)), within 20 days from service of the hearing order, any 
respondent may file with the Comptroller a request for a private 
hearing, and any party may file a reply to such a request. A party must 
serve on the administrative law judge a copy of any request or reply 
the party files with the Comptroller. The form of, and procedure for, 
these requests and replies are governed by Sec.  19.23. A party's 
failure to file a request or a reply constitutes a waiver of any 
objections regarding whether the hearing will be public or private.
    (b) Filing document under seal. Enforcement Counsel, in his or her 
discretion, may file any document or part of a document under seal if 
disclosure of the document would be contrary to the public interest. 
The administrative law judge shall take all appropriate steps to 
preserve the confidentiality of such documents or parts thereof, 
including closing portions of the hearing to the public.


Sec.  19.34  Hearing subpoenas.

    (a) Issuance. (1) Upon application of a party showing general 
relevance and reasonableness of scope of the testimony or other 
evidence sought, the administrative law judge may issue a subpoena or a 
subpoena duces tecum requiring the attendance of a witness at the 
hearing or the production of documentary or physical evidence at the 
hearing. The application for a hearing subpoena must also contain a 
proposed subpoena specifying the attendance of a witness or the 
production of evidence from any state, territory, or possession of the 
United States, the District of Columbia, or as otherwise provided by 
law at any designated place where the hearing is being conducted. The 
party making the application shall serve a copy of the application and 
the proposed subpoena on every other party.
    (2) A party may apply for a hearing subpoena at any time before the 
commencement of a hearing. During a hearing, a party may make an

[[Page 89879]]

application for a subpoena orally on the record before the 
administrative law judge.
    (3) The administrative law judge shall promptly issue any hearing 
subpoena requested pursuant to this section. If the administrative law 
judge determines that the application does not set forth a valid basis 
for the issuance of the subpoena, or that any of its terms are 
unreasonable, oppressive, excessive in scope, or unduly burdensome, he 
or she may refuse to issue the subpoena or may issue it in a modified 
form upon any conditions consistent with this subpart. Upon issuance by 
the administrative law judge, the party making the application shall 
serve the subpoena on the person named in the subpoena and on each 
party.
    (b) Motion to quash or modify. (1) Any person to whom a hearing 
subpoena is directed or any party may file a motion to quash or modify 
the subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant must serve the motion on each party 
and on the person named in the subpoena. Any party may respond to the 
motion within ten days of service of the motion.
    (2) Any motion to quash or modify a hearing subpoena must be filed 
prior to the time specified in the subpoena for compliance but not more 
than ten days after the date of service of the subpoena upon the 
movant.
    (c) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section or any order of the 
administrative law judge which directs compliance with all or any 
portion of a document subpoena, the subpoenaing party or any other 
aggrieved party may seek enforcement of the subpoena pursuant to Sec.  
19.26(c).


Sec.  19.35  Conduct of hearings.

    (a) General rules. (1) Hearings shall be conducted so as to provide 
a fair and expeditious presentation of the relevant disputed issues. 
Each party has the right to present its case or defense by oral and 
documentary evidence and to conduct such cross examination as may be 
required for full disclosure of the facts.
    (2) Order of hearing. Enforcement Counsel shall present its case-
in-chief first, unless otherwise ordered by the administrative law 
judge, or unless otherwise expressly specified by law or regulation. 
Enforcement Counsel shall be the first party to present an opening 
statement and a closing statement, and may make a rebuttal statement 
after the respondent's closing statement. If there are multiple 
respondents, respondents may agree among themselves as to their order 
of presentation of their cases, but if they do not agree, the 
administrative law judge shall fix the order.
    (3) Examination of witnesses. Only one counsel for each party may 
conduct an examination of a witness, except that in the case of 
extensive direct examination, the administrative law judge may permit 
more than one counsel for the party presenting the witness to conduct 
the examination. A party may have one counsel conduct the direct 
examination and another counsel conduct re-direct examination of a 
witness, or may have one counsel conduct the cross examination of a 
witness and another counsel conduct the re-cross examination of a 
witness.
    (4) Stipulations. Unless the administrative law judge directs 
otherwise, all stipulations of fact and law previously agreed upon by 
the parties, and all documents, the admissibility of which have been 
previously stipulated, will be admitted into evidence upon commencement 
of the hearing.
    (b) Transcript. The hearing must be recorded and transcribed. The 
reporter will make the transcript available to any party upon payment 
by that party to the reporter of the cost of the transcript. The 
administrative law judge may order the record corrected, either upon 
motion to correct, upon stipulation of the parties, or following notice 
to the parties upon the administrative law judge's own motion.


Sec.  19.36  Evidence.

    (a) Admissibility. (1) Except as is otherwise set forth in this 
section, relevant, material, and reliable evidence that is not unduly 
repetitive is admissible to the fullest extent authorized by the 
Administrative Procedure Act and other applicable law.
    (2) Evidence that would be admissible under the Federal Rules of 
Evidence is admissible in a proceeding conducted pursuant to this 
subpart.
    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence may not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant, 
material, reliable and not unduly repetitive.
    (b) Official notice. (1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court and any material information in the official public 
records of any Federal or state government agency.
    (2) All matters officially noticed by the administrative law judge 
or the Comptroller shall appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, shall be afforded an opportunity to 
object.
    (c) Documents. (1) A duplicate copy of a document is admissible to 
the same extent as the original, unless a genuine issue is raised as to 
whether the copy is in some material respect not a true and legible 
copy of the original.
    (2) Subject to the requirements of paragraph (a) of this section, 
any document, including a report of examination, supervisory activity, 
inspection or visitation, prepared by an appropriate Federal financial 
institutions regulatory agency or by a state regulatory agency, is 
admissible either with or without a sponsoring witness.
    (3) Witnesses may use existing or newly created charts, exhibits, 
calendars, calculations, outlines or other graphic material to 
summarize, illustrate, or simplify the presentation of testimony. Such 
materials may, subject to the administrative law judge's discretion, be 
used with or without being admitted into evidence.
    (d) Objections. (1) Objections to the admissibility of evidence 
must be timely made and rulings on all objections must appear on the 
record.
    (2) When an objection to a question or line of questioning 
propounded to a witness is sustained, the examining counsel may make a 
specific proffer on the record of what he or she expected to prove by 
the expected testimony of the witness either by representation of 
counsel or by direct interrogation of the witness.
    (3) The administrative law judge shall retain rejected exhibits, 
adequately marked for identification, for the record, and transmit such 
exhibits to the Comptroller.
    (4) Failure to object to admission of evidence or to any ruling 
constitutes a waiver of the objection.
    (e) Stipulations. The parties may stipulate as to any relevant 
matters of fact or the authentication of any relevant documents. Such 
stipulations must be received in evidence at a hearing and are binding 
on the parties with respect to the matters therein stipulated.
    (f) Depositions of unavailable witnesses. (1) If a witness is 
unavailable to testify at a hearing, and that witness has testified in 
a deposition to which all parties in a proceeding had notice and an 
opportunity to participate, a party may offer as evidence all or any 
part of the transcript of the deposition, including deposition 
exhibits, if any.
    (2) Such deposition transcript is admissible to the same extent 
that testimony would have been admissible

[[Page 89880]]

had that person testified at the hearing, provided that if a witness 
refused to answer proper questions during the depositions, the 
administrative law judge may, on that basis, limit the admissibility of 
the deposition in any manner that justice requires.
    (3) Only those portions of a deposition received in evidence at the 
hearing constitute a part of the record.


Sec.  19.37  Post-hearing filings.

    (a) Proposed findings and conclusions and supporting briefs. (1) 
Using the same method of service for each party, the administrative law 
judge shall serve notice upon each party that the certified transcript, 
together with all hearing exhibits and exhibits introduced but not 
admitted into evidence at the hearing, has been filed. Any party may 
file with the administrative law judge proposed findings of fact, 
proposed conclusions of law, and a proposed order within 30 days 
following service of this notice by the administrative law judge or 
within such longer period as may be ordered by the administrative law 
judge.
    (2) Proposed findings and conclusions must be supported by citation 
to any relevant authorities and by page references to any relevant 
portions of the record. A post-hearing brief may be filed in support of 
proposed findings and conclusions, either as part of the same document 
or in a separate document. Any party who fails to file timely with the 
administrative law judge any proposed finding or conclusion is deemed 
to have waived the right to raise in any subsequent filing or 
submission any issue not addressed in such party's proposed finding or 
conclusion.
    (b) Reply briefs. Reply briefs may be filed within 15 days after 
the date on which the parties' proposed findings, conclusions, and 
order are due. Reply briefs must be strictly limited to responding to 
new matters, issues, or arguments raised in another party's papers. A 
party who has not filed proposed findings of fact and conclusions of 
law or a post-hearing brief may not file a reply brief.
    (c) Simultaneous filing required. The administrative law judge 
shall not order the filing by any party of any brief or reply brief in 
advance of the other party's filing of its brief.


Sec.  19.38  Recommended decision and filing of record.

    (a) Filing of recommended decision and record. Within 45 days after 
expiration of the time allowed for filing reply briefs under Sec.  
19.37(b), the administrative law judge shall file with and certify to 
the Comptroller, for decision, the record of the proceeding. The record 
must include the administrative law judge's recommended decision, 
recommended findings of fact, recommended conclusions of law, and 
proposed order; all prehearing and hearing transcripts, exhibits, and 
rulings; and the motions, briefs, memoranda, and other supporting 
papers filed in connection with the hearing. The administrative law 
judge shall serve upon each party the recommended decision, findings, 
conclusions, and proposed order.
    (b) Filing of index. At the same time the administrative law judge 
files with and certifies to the Comptroller for final determination the 
record of the proceeding, the administrative law judge shall furnish to 
the Comptroller a certified index of the entire record of the 
proceeding. The certified index shall include, at a minimum, an entry 
for each paper, document or motion filed with the administrative law 
judge in the proceeding, the date of the filing, and the identity of 
the filer. The certified index shall also include an exhibit index 
containing, at a minimum, an entry consisting of exhibit number and 
title or description for: Each exhibit introduced and admitted into 
evidence at the hearing; each exhibit introduced but not admitted into 
evidence at the hearing; each exhibit introduced and admitted into 
evidence after the completion of the hearing; and each exhibit 
introduced but not admitted into evidence after the completion of the 
hearing.


Sec.  19.39  Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  19.38, a party may file with the Comptroller written exceptions 
to the administrative law judge's recommended decision, findings, 
conclusions or proposed order, to the admission or exclusion of 
evidence, or to the failure of the administrative law judge to make a 
ruling proposed by a party. A supporting brief may be filed at the time 
the exceptions are filed, either as part of the same document or in a 
separate document.
    (b) Effect of failure to file or raise exceptions. (1) Failure of a 
party to file exceptions to those matters specified in paragraph (a) of 
this section within the time prescribed is deemed a waiver of objection 
thereto.
    (2) No exception need be considered by the Comptroller if the party 
taking exception had an opportunity to raise the same objection, issue, 
or argument before the administrative law judge and failed to do so.
    (c) Contents. (1) All exceptions and briefs in support of such 
exceptions must be confined to the particular matters in, or omissions 
from, the administrative law judge's recommendations to which that 
party takes exception.
    (2) All exceptions and briefs in support of exceptions must set 
forth page or paragraph references to the specific parts of the 
administrative law judge's recommendations to which exception is taken, 
the page or paragraph references to those portions of the record relied 
upon to support each exception, and the legal authority relied upon to 
support each exception.


Sec.  19.40  Review by the Comptroller.

    (a) Notice of submission to the Comptroller. When the Comptroller 
determines that the record in the proceeding is complete, the 
Comptroller shall serve notice upon the parties that the proceeding has 
been submitted to the Comptroller for final decision.
    (b) Oral argument before the Comptroller. Upon the initiative of 
the Comptroller or on the written request of any party filed with the 
Comptroller within the time for filing exceptions, the Comptroller may 
order and hear oral argument on the recommended findings, conclusions, 
decision, and order of the administrative law judge. A written request 
by a party must show good cause for oral argument and state reasons why 
arguments cannot be presented adequately in writing. A denial of a 
request for oral argument may be set forth in the Comptroller's final 
decision. Oral argument before the Comptroller must be on the record.
    (c) Comptroller's final decision. (1) Decisional employees may 
advise and assist the Comptroller in the consideration and disposition 
of the case. The final decision of the Comptroller will be based upon 
review of the entire record of the proceeding, except that the 
Comptroller may limit the issues to be reviewed to those findings and 
conclusions to which opposing arguments or exceptions have been filed 
by the parties.
    (2) The Comptroller shall render a final decision within 90 days 
after notification of the parties that the case has been submitted for 
final decision, or 90 days after oral argument, whichever is later, 
unless the Comptroller orders that the action or any aspect thereof be 
remanded to the administrative law judge for further proceedings. 
Copies of the final decision and order of the Comptroller shall be 
served upon each party to the proceeding, upon other

[[Page 89881]]

persons required by statute, and, if directed by the Comptroller or 
required by statute, upon any appropriate state or Federal supervisory 
authority.


Sec.  19.41  Stays pending judicial review.

    The commencement of proceedings for judicial review of a final 
decision and order of the Comptroller may not, unless specifically 
ordered by the Comptroller or a reviewing court, operate as a stay of 
any order issued by the Comptroller. The Comptroller may, in his or her 
discretion, and on such terms as he or she finds just, stay the 
effectiveness of all or any part of an order pending a final decision 
on a petition for review of that order.

Subpart B--Procedural Rules for OCC Adjudications


Sec.  19.100  Filing documents.

    All materials required to be filed with or referred to the 
Comptroller or the administrative law judge in any proceeding under 
this part must be filed with the Hearing Clerk, Office of the 
Comptroller of the Currency, Washington, DC 20219. Filings to be made 
with the Hearing Clerk include the notice and answer; motions and 
responses to motions; briefs; the record filed by the administrative 
law judge after the issuance of a recommended decision; the recommended 
decision filed by the administrative law judge following a motion for 
summary disposition; referrals by the administrative law judge of 
motions for interlocutory review; exceptions and requests for oral 
argument; and any other papers required to be filed with the 
Comptroller or the administrative law judge under this part.


Sec.  19.101  Delegation to OFIA.

    Unless otherwise ordered by the Comptroller, administrative 
adjudications subject to subpart A of this part shall be conducted by 
an administrative law judge assigned to OFIA.

Subpart C--Removals, Suspensions, and Prohibitions When a Crime Is 
Charged or a Conviction Is Obtained


Sec.  19.110  Scope.

    This subpart applies to informal hearings afforded to any 
institution-affiliated party who has been suspended or removed from 
office or prohibited from further participation in the affairs of any 
depository institution pursuant to 12 U.S.C. 1818(g) by a notice or 
order issued by the Comptroller.


Sec.  19.111  Suspension, removal, or prohibition.

    The Comptroller may serve a notice of suspension or order of 
removal or prohibition pursuant to 12 U.S.C. 1818(g) on an institution-
affiliated party. A copy of such notice or order will be served on any 
depository institution that the subject of the notice or order is 
affiliated with at the time the notice or order is issued, whereupon 
the institution-affiliated party involved must immediately cease 
service to, or participation in the affairs of, that depository 
institution and, if so determined by the OCC, any other depository 
institution. The notice or order will indicate the basis for 
suspension, removal or prohibition and will inform the institution-
affiliated party of the right to request in writing, to be received by 
the OCC within 30 days from the date that the institution-affiliated 
party was served with such notice or order, an opportunity to show at 
an informal hearing that continued service to or participation in the 
conduct of the affairs of any depository institution has not posed, 
does not pose, or is not likely to pose a threat to the interests of 
the depositors of, or has not threatened, does not threaten, or is not 
likely to threaten to impair public confidence in, any relevant 
depository institution. The written request must be sent by certified 
mail to, or served personally with a signed receipt on, the District 
Deputy Comptroller in the OCC district in which the bank in question is 
located; if the bank is supervised by Large Bank Supervision, to the 
Senior Deputy Comptroller for Large Bank Supervision for the Office of 
the Comptroller of the Currency; if the bank is supervised by Mid-Size/
Community Bank Supervision, to the Senior Deputy Comptroller for Mid-
Size/Community Bank Supervision for the Office of the Comptroller of 
the Currency; or if the institution-affiliated party is no longer 
affiliated with a particular national bank, to the Deputy Comptroller 
for Special Supervision, Washington, DC 20219. The request must state 
specifically the relief desired and the grounds on which that relief is 
based. For purposes of this section, the term depository institution 
means any depository institution of which the petitioner is or was an 
institution-affiliated party at the time at which the notice or order 
was issued by the Comptroller.


Sec.  19.112  Informal hearing.

    (a) Issuance of hearing order. After receipt of a request for 
hearing, the District Deputy Comptroller, the Senior Deputy Comptroller 
for Large Bank Supervision, the Senior Deputy Comptroller for Mid-Size/
Community Bank Supervision, or the Deputy Comptroller for Special 
Supervision, as appropriate, must notify the petitioner requesting the 
hearing, the OCC's Enforcement and Compliance Division, and the 
appropriate OCC District Counsel of the date, time, and place fixed for 
the hearing. The hearing must be scheduled to be held not later than 30 
days from the date when a request for hearing is received unless the 
time is extended in response to a written request of the petitioner. 
The District Deputy Comptroller, the Senior Deputy Comptroller for 
Large Bank Supervision, the Senior Deputy Comptroller for Mid-Size/
Community Bank Supervision, or the Deputy Comptroller for Special 
Supervision, as appropriate, may extend the hearing date only for a 
specific period of time and must take appropriate action to ensure that 
the hearing is not unduly delayed.
    (b) Appointment of presiding officer. the District Deputy 
Comptroller, the Senior Deputy Comptroller for Large Bank Supervision, 
the Senior Deputy Comptroller for Mid-Size/Community Bank Supervision, 
or the Deputy Comptroller for Special Supervision, as appropriate, must 
appoint one or more OCC employees as the presiding officer to conduct 
the hearing. The presiding officer(s) may not have been involved in the 
proceeding, a factually related proceeding, or the underlying 
enforcement action in a prosecutorial or investigative role.
    (c) Waiver of oral hearing--(1) Petitioner. When the petitioner 
requests a hearing, the petitioner may elect to have the matter 
determined by the presiding officer solely on the basis of written 
submissions by serving on the District Deputy Comptroller, the Senior 
Deputy Comptroller for Large Bank Supervision, the Senior Deputy 
Comptroller for Mid-Size/Community Bank Supervision, or the Deputy 
Comptroller for Special Supervision, as appropriate, and all parties, a 
signed document waiving the statutory right to appear and make oral 
argument. The petitioner must present the written submissions to the 
presiding officer, and serve the other parties, not later than ten days 
prior to the date fixed for the hearing, or within such shorter time 
period as the presiding officer may permit.
    (2) OCC. The OCC may respond to the petitioner's submissions by 
presenting the presiding officer with a written response, and by 
serving the other parties, not later than the date fixed for the 
hearing, or within such other time

[[Page 89882]]

period as the presiding officer may require.
    (d) Hearing procedures--(1) Conduct of hearing. Hearings under this 
subpart are not subject to the provisions of subpart A of this part or 
the adjudicative provisions of the Administrative Procedure Act (5 
U.S.C. 554-557).
    (2) Powers of the presiding officer. The presiding officer shall 
determine all procedural issues that are governed by this subpart. The 
presiding officer may also permit or limit the number of witnesses and 
impose time limitations as he or she deems reasonable. The informal 
hearing will not be governed by the formal rules of evidence. All oral 
presentations, when permitted, and documents deemed by the presiding 
officer to be relevant and material to the proceeding and not unduly 
repetitious will be considered. The presiding officer may ask questions 
of any person participating in the hearing and may make any rulings 
reasonably necessary to facilitate the effective and efficient 
operation of the hearing.
    (3) Presentation. (i) The OCC may appear and the petitioner may 
appear personally or through counsel at the hearing to present relevant 
written materials and oral argument. Except as permitted in paragraph 
(c) of this section, each party, including the OCC, must file a copy of 
any affidavit, memorandum, or other written material to be presented at 
the hearing with the presiding officer and must serve the other parties 
not later than ten days prior to the hearing or within such shorter 
time period as permitted by the presiding officer.
    (ii) If the petitioner or the appointed OCC attorney desires to 
present oral testimony or witnesses at the hearing, he or she must file 
a written request with the presiding officer not later than ten days 
prior to the hearing, or within a shorter time period as permitted by 
the presiding officer. The names of proposed witnesses should be 
included, along with the general nature of the expected testimony, and 
the reasons why oral testimony is necessary. The presiding officer 
generally will not admit oral testimony or witnesses unless a specific 
and compelling need is demonstrated. Witnesses, if admitted, shall be 
sworn.
    (iii) In deciding on any suspension, the presiding officer shall 
not consider the ultimate question of the guilt or innocence of the 
individual with respect to the criminal charges which are outstanding. 
In deciding on any removal, the presiding officer shall not consider 
challenges to or efforts to impeach the validity of the conviction. The 
presiding officer may consider facts in either situation, however, 
which show the nature of the events on which the indictment or 
conviction was based.
    (4) Record. A transcript of the proceedings may be taken if the 
petitioner requests a transcript and agrees to pay all expenses or if 
the presiding officer determines that the nature of the case warrants a 
transcript. The presiding officer may order the record to be kept open 
for a reasonable period following the hearing, not to exceed five 
business days, to permit the petitioner or the appointed OCC attorney 
to submit additional documents for the record. Thereafter, no further 
submissions may be accepted except for good cause shown.


Sec.  19.113  Recommended and final decisions.

    (a) The presiding officer must issue a recommended decision to the 
Comptroller within 20 days of the conclusion of the hearing or, when 
the petitioner has waived an oral hearing, within 20 days of the date 
fixed for the hearing. The presiding officer must serve promptly a copy 
of the recommended decision on the parties to the proceeding. The 
decision must include a summary of the facts and arguments of the 
parties.
    (b) Each party may, within ten days of being served with the 
presiding officer's recommended decision, submit to the Comptroller 
comments on the recommended decision.
    (c) Within 60 days of the conclusion of the hearing or, when the 
petitioner has waived an oral hearing, within 60 days from the date 
fixed for the hearing, the Comptroller must notify the petitioner by 
registered mail whether the suspension or removal from office, and 
prohibition from participation in any manner in the affairs of any 
depository institution, will be affirmed, terminated, or modified. The 
Comptroller's decision must include a statement of reasons supporting 
the decision. The Comptroller's decision is a final and unappealable 
order.
    (d) A finding of not guilty or other disposition of the charge on 
which a notice of suspension was based does not preclude the 
Comptroller from thereafter instituting removal proceedings pursuant to 
section 8(e) of the FDIA (12 U.S.C. 1818(e)) and subpart: A of this 
part.
    (e) A removal or prohibition by order remains in effect until 
terminated by the Comptroller. A suspension or prohibition by notice 
remains in effect until the criminal charge is disposed of or until 
terminated by the Comptroller.
    (f) A suspended or removed individual may petition the Comptroller 
to reconsider the decision any time after the expiration of a 12-month 
period from the date of the decision, but no petition for 
reconsideration may be made within 12 months of a previous petition. 
The petition must state specifically the relief sought and the grounds 
therefor, and may be accompanied by a supporting memorandum and any 
other documentation the petitioner wishes to have considered. No 
hearing need be granted on the petition for reconsideration.

Subpart D--Exemption Hearings Under Section 12(h) of the Securities 
Exchange Act of 1934


Sec.  19.120  Scope.

    The rules in this subpart apply to informal hearings that may be 
held by the Comptroller to determine whether, pursuant to authority in 
sections 12 (h) and (i) of the Exchange Act (15 U.S.C. 78l (h) and 
(i)), to exempt in whole or in part an issuer or a class of issuers 
from the provisions of section 12(g), or from section 13 or 14 of the 
Exchange Act (15 U.S.C. 78l(g), 78m or 78n), or whether to exempt from 
section 16 of the Exchange Act (15 U.S.C. 78p) any officer, director, 
or beneficial owner of securities of an issuer. The only issuers 
covered by this subpart are banks whose securities are registered 
pursuant to section 12(g) of the Exchange Act (15 U.S.C. 78l(g)). The 
Comptroller may deny an application for exemption without a hearing.


Sec.  19.121  Application for exemption.

    An issuer or an individual (officer, director or shareholder) may 
submit a written application for an exemption order to the Securities 
and Corporate Practices Division, Office of the Comptroller of the 
Currency, Washington, DC 20219. The application must specify the type 
of exemption sought and the reasons therefor, including an explanation 
of why an exemption would not be inconsistent with the public interest 
or the protection of investors. The Securities and Corporate Practices 
Division shall inform the applicant in writing whether a hearing will 
be held to consider the matter.


Sec.  19.122  Newspaper notice.

    Upon being informed that an application will be considered at a 
hearing, the applicant shall publish a notice one time in a newspaper 
of general circulation in the community where the issuer's main office 
is located. The notice must state: the name and title of any individual 
applicants; the

[[Page 89883]]

type of exemption sought; the fact that a hearing will be held; and a 
statement that interested persons may submit to the Securities and 
Corporate Practices Division, Office of the Comptroller of the 
Currency, Washington, DC 20219, within 30 days from the date of the 
newspaper notice, written comments concerning the application and a 
written request for an opportunity to be heard. The applicant shall 
promptly furnish a copy of the notice to the Securities and Corporate 
Practices Division, and to bank shareholders.


Sec.  19.123  Informal hearing.

    (a) Conduct of proceeding. The adjudicative provisions of the 
Administrative Procedure Act, formal rules of evidence and subpart A of 
this part do not apply to hearings conducted under this subpart, except 
as provided in Sec.  19.100(b).
    (b) Notice of hearing. Following the comment period, the 
Comptroller shall send a notice which fixes a date, time and place for 
hearing to each applicant and to any person who has requested an 
opportunity to be heard.
    (c) Presiding officer. The Comptroller shall designate a presiding 
officer to conduct the hearing. The presiding officer shall determine 
all procedural questions not governed by this subpart and may limit the 
number of witnesses and impose time and presentation limitations as are 
deemed reasonable. At the conclusion of the informal hearing, the 
presiding officer shall issue a recommended decision to the Comptroller 
as to whether the exemption should issue. The decision shall include a 
summary of the facts and arguments of the parties.
    (d) Attendance. The applicant and any person who has requested an 
opportunity to be heard may attend the hearing, with or without 
counsel. The hearing shall be open to the public. In addition, the 
applicant and any other hearing participant may introduce oral 
testimony through such witnesses as the presiding officer shall permit.
    (e) Order of presentation. (1) The applicant may present an opening 
statement of a length decided by the presiding officer. Then each of 
the hearing participants, or one among them selected with the approval 
of the presiding officer, may present an opening statement. The opening 
statement should summarize concisely what the applicant and each 
participant intends to show.
    (2) The applicant shall have an opportunity to make an oral 
presentation of facts and materials or submit written materials for the 
record. One or more of the hearing participants may make an oral 
presentation or a written submission.
    (3) After the above presentations, the applicant, followed by one 
or more of the hearing participants, may make concise summary 
statements reviewing their position.
    (f) Witnesses. The obtaining and use of witnesses is the 
responsibility of the parties afforded the hearing. All witnesses shall 
be present on their own volition, but any person appearing as a witness 
may be questioned by each applicant, any hearing participant, and the 
presiding officer. Witnesses shall be sworn unless otherwise directed 
by the presiding officer.
    (g) Evidence. The presiding officer may exclude data or materials 
deemed to be improper or irrelevant. Formal rules of evidence do not 
apply. Documentary material must be of a size consistent with ease of 
handling and filing. The presiding officer may determine the number of 
copies that must be furnished for purposes of the hearing.
    (h) Transcript. A transcript of each proceeding will be arranged by 
the OCC, with all expenses, including the furnishing of a copy to the 
presiding officer, being borne by the applicant.


Sec.  19.124  Decision of the Comptroller.

    Following the conclusion of the hearing and the submission of the 
record and the presiding officer's recommended decision to the 
Comptroller for decision, the Comptroller shall notify the applicant 
and all persons who have so requested in writing of the final 
disposition of the application. Exemptions granted must be in the form 
of an order which specifies the type of exemption granted and its terms 
and conditions.

Subpart E--Disciplinary Proceedings Involving the Federal 
Securities Laws


Sec.  19.130  Scope.

    (a) Except as provided in this subpart, subpart A of this part 
applies to proceedings by the Comptroller to determine whether, 
pursuant to authority contained in sections 15B(c)(5), 15C(c)(2)(A), 
17A(c)(3), and 17A(c)(4)(C) of the Exchange Act (15 U.S.C. 78o-4(c)(5), 
78o-5(c)(2)(A), 78q-1(c)(3)(A), and 78q-1(c)(4)(C)), to take 
disciplinary action against the following:
    (1) A bank which is a municipal securities dealer, or any person 
associated or seeking to become associated with such a municipal 
securities dealer;
    (2) A bank which is a government securities broker or dealer, or 
any person associated with such government securities broker or dealer; 
or
    (3) A bank which is a transfer agent, or any person associated or 
seeking to become associated with such transfer agent.
    (b) In addition to the issuance of disciplinary orders after 
opportunity for hearing, the Comptroller or the Comptroller's delegate 
may issue and serve any notices and temporary or permanent cease-and-
desist orders and take any actions that are authorized by section 8 of 
the FDIA (12 U.S.C. 1818), sections 15B(c)(5), 15C(c)(2)(B), and 
17A(d)(2) of the Exchange Act, and other subparts of this part against 
the following:
    (1) The parties listed in paragraph (a) of this section; and
    (2) A bank which is a clearing agency.
    (c) Nothing in this subpart impairs the powers conferred on the 
Comptroller by other provisions of law.


Sec.  19.131  Notice of charges and answer.

    (a) Proceedings are commenced when the Comptroller serves a notice 
of charges on a bank or associated person. The notice must indicate the 
type of disciplinary action being contemplated and the grounds 
therefor, and fix a date, time and place for hearing. The hearing must 
be set for a date at least 30 days after service of the notice. A party 
served with a notice of charges may file an answer as prescribed in 
Sec.  19.19. Any party who fails to appear at a hearing personally or 
by a duly authorized representative shall be deemed to have consented 
to the issuance of a disciplinary order.
    (b) All proceedings under this subpart must be commenced, and the 
notice of charges must be filed, on a public basis, unless otherwise 
ordered by the Comptroller. Pursuant to Sec.  19.33(a), a request for a 
private hearing may be filed within 20 days of service of the notice.


Sec.  19.132  Disciplinary orders.

    (a) In the event of consent, or if on the record filed by the 
administrative law judge, the Comptroller finds that any act or 
omission or violation specified in the notice of charges has been 
established, the Comptroller may serve on the bank or persons concerned 
a disciplinary order, as provided in the Exchange Act. The order may:
    (1) Censure, limit the activities, functions or operations, or 
suspend or revoke the registration of a bank which is a municipal 
securities dealer;
    (2) Censure, suspend or bar any person associated or seeking to 
become associated with a municipal securities dealer;

[[Page 89884]]

    (3) Censure, limit the activities, functions or operations, or 
suspend or bar a bank which is a government securities broker or 
dealer;
    (4) Censure, limit the activities, functions or operations, or 
suspend or bar any person associated with a government securities 
broker or dealer;
    (5) Deny registration to, limit the activities, functions, or 
operations or suspend or revoke the registration of a bank which is a 
transfer agent; or
    (6) Censure or limit the activities or functions, or suspend or 
bar, any person associated or seeking to become associated with a 
transfer agent.
    (b) A disciplinary order is effective when served on the party or 
parties involved and remains effective and enforceable until it is 
stayed, modified, terminated, or set aside by action of the Comptroller 
or a reviewing court.


Sec.  19.135  Applications for stay or review of disciplinary actions 
imposed by registered clearing agencies.

    (a) Stays. The rules adopted by the Securities and Exchange 
Commission (SEC) pursuant to section 19 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78s) regarding applications by persons for whom the 
SEC is the appropriate regulatory agency for stays of disciplinary 
sanctions or summary suspensions imposed by registered clearing 
agencies (17 CFR 240.19d-2) apply to applications by national banks. 
References to the ``Commission'' are deemed to refer to the ``OCC.''
    (b) Reviews. The regulations adopted by the SEC pursuant to section 
19 of the Securities Exchange Act of 1934 (15 U.S.C. 78s) regarding 
applications by persons for whom the SEC is the appropriate regulatory 
agency for reviews of final disciplinary sanctions, denials of 
participation, or prohibitions or limitations of access to services 
imposed by registered clearing agencies (17 CFR 240.19d-3(a)-(f)) apply 
to applications by national banks. References to the ``Commission'' are 
deemed to refer to the ``OCC.''

Subpart F--Civil Money Penalty Authority Under the Securities Laws


Sec.  19.140  Scope.

    (a) Except as provided in this subpart, subpart A of this part 
applies to proceedings by the Comptroller to determine whether, 
pursuant to authority contained in section 21B of the Exchange Act (15 
U.S.C. 78u-2), in proceedings commenced pursuant to sections 15B, 15C, 
and 17A of the Exchange Act (15 U.S.C. 78o-4, 78o-5, or 78q-1) for 
which the OCC is the appropriate regulatory agency under section 
3(a)(34) of the Exchange Act (15 U.S.C. 78c(a)(34)), the Comptroller 
may impose a civil money penalty against the following:
    (1) A bank which is a municipal securities dealer, or any person 
associated or seeking to become associated with such a municipal 
securities dealer;
    (2) A bank which is a government securities broker or dealer, or 
any person associated with such government securities broker or dealer; 
or
    (3) A bank which is a transfer agent, or any person associated or 
seeking to become associated with such transfer agent.
    (b) All proceedings under this subpart must be commenced, and the 
notice of assessment must be filed, on a public basis, unless otherwise 
ordered by the Comptroller. Pursuant to Sec.  19.33(a), any request for 
a private hearing must be filed within 20 days of service of the 
notice.

Subpart G--Cease-and-Desist Authority Under the Securities Laws


Sec.  19.150  Scope.

    (a) Except as provided in this subpart, subpart A of this part 
applies to proceedings by the Comptroller to determine whether, 
pursuant to authority contained in sections 12(i) and 21C of the 
Exchange Act (15 U.S.C. 78l(i) and 78u-3), the Comptroller may initiate 
cease-and-desist proceedings against a national bank for violations of 
sections 12, 13, 14(a), 14(c), 14(d), 14(f), and 16 of the Exchange Act 
or regulations or rules issued thereunder (15 U.S.C. 78l, 78m, 78n(a), 
78n(c), 78n(d), 78n(f), and 78p).
    (b) All proceedings under this subpart must be commenced, and the 
notice of charges must be filed, on a public basis, unless otherwise 
ordered by the Comptroller. Pursuant to Sec.  19.33(a), any request for 
a private hearing must be filed within 20 days of service of the 
notice.

Subpart H--Change in Bank Control


Sec.  19.160  Scope.

    (a) Section 7(j) of the FDIA (12 U.S.C. 1817(j)) provides that no 
person may acquire control of an insured depository institution unless 
the appropriate Federal bank regulatory agency has been given prior 
written notice of the proposed acquisition. If, after investigating and 
soliciting comment on the proposed acquisition, the agency decides that 
the acquisition should be disapproved, the agency shall mail a written 
notification to the proposed acquiring person in writing within three 
days of the decision. The party can then request an agency hearing on 
the proposed acquisition. The OCC's procedures for reviewing notices of 
proposed acquisitions in change-in-control proceedings are set forth in 
Sec.  5.50 of this chapter.
    (b) Unless otherwise provided in this subpart, the rules in subpart 
A of this part set forth the procedures applicable to requests for OCC 
hearings.


Sec.  19.161  Notice of disapproval and hearing initiation.

    (a) Notice of disapproval. The OCC's written disapproval of a 
proposed acquisition of control of a national bank must:
    (1) Contain a statement of the basis for the disapproval; and
    (2) Indicate that the filer may request a hearing.
    (b) Hearing request. Following receipt of a notice of disapproval, 
a filer may request a hearing on the proposed acquisition. A hearing 
request must:
    (1) Be in writing; and
    (2) Be filed with the Hearing Clerk of the OCC within ten days 
after service on the filer of the notice of disapproval. If a filer 
fails to request a hearing with a timely written request, the notice of 
disapproval constitutes a final and unappealable order.
    (c) Hearing order. Following receipt of a hearing request, the 
Comptroller shall issue, within 20 days, an order that sets forth:
    (1) The legal authority for the proceeding and for the OCC's 
jurisdiction over the proceeding;
    (2) The matters of fact or law upon which the disapproval is based; 
and
    (3) The requirement for filing an answer to the hearing order with 
OFIA within 20 days after service of the hearing order.
    (d) Answer. An answer to a hearing order must specifically deny 
those portions of the order that are disputed. Those portions of the 
order that the filer does not specifically deny are deemed admitted by 
the filer. Any hearing under this subpart is limited to those portions 
of the order that are specifically denied.
    (e) Effect of failure to answer. Failure of a filer to file an 
answer within 20 days after service of the hearing order constitutes a 
waiver of the filer's right to appear and contest the allegations in 
the hearing order. If a filer does not file a timely answer, 
enforcement counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the administrative law judge shall file with the 
Comptroller a recommended decision containing the findings and the 
relief sought in the

[[Page 89885]]

hearing order. Any final order issued by the Comptroller based upon a 
filer's failure to answer is deemed to be an order issued upon consent 
and is a final and unappealable order.

Subpart I--Discovery Depositions and Subpoenas


Sec.  19.170  Discovery depositions.

    (a) General rule. In any proceeding instituted under or subject to 
the provisions of subpart A of this part, a party may take the 
deposition of an expert, or of a person, including another party, who 
has direct knowledge of matters that are non-privileged, relevant, and 
material to the proceeding, and where there is need for the deposition. 
The deposition of experts shall be limited to those experts who are 
expected to testify at the hearing.
    (b) Notice. A party desiring to take a deposition shall give 
reasonable notice in writing to the deponent and to every other party 
to the proceeding. The notice must state the time and place for taking 
the deposition, and the name and address of the person to be deposed.
    (c) Time limits. A party may take depositions at any time after the 
commencement of the proceeding, but no later than ten days before the 
scheduled hearing date, except with permission of the administrative 
law judge for good cause shown.
    (d) Conduct of the deposition. The witness must be duly sworn, and 
each party will have the right to examine the witness with respect to 
all non-privileged, relevant, and material matters of which the witness 
has factual, direct, and personal knowledge. Objections to questions or 
exhibits must be in short form and must state the grounds for the 
objection. Failure to object to questions or exhibits is not a waiver 
except where the grounds for the objection might have been avoided if 
the objection had been timely presented.
    (e) Recording the testimony--(1) Generally. The party taking the 
deposition must have a certified court reporter record the witness's 
testimony:
    (i) By stenotype machine or electronic sound recording device;
    (ii) Upon agreement of the parties, by any other method; or
    (iii) For good cause and with leave of the administrative law 
judge, by any other method.
    (2) Cost. The party taking the deposition must bear the cost of the 
recording and transcribing the witness's testimony.
    (3) Transcript. Unless the parties agree that a transcription is 
not necessary, the court reporter must provide a transcript of the 
witness's testimony to the party taking the deposition and must make a 
copy of the transcript available to each party upon payment by that 
party of the cost of the copy.
    (f) Protective orders. At any time after notice of a deposition has 
been given, a party may file a motion for the issuance of a protective 
order. Such protective order may prohibit, terminate, or limit the 
scope or manner of the taking of a deposition. The administrative law 
judge shall grant such protective order upon a showing of sufficient 
grounds, including that the deposition:
    (1) Is unreasonable, oppressive, excessive in scope, or unduly 
burdensome;
    (2) Involves privileged, irrelevant, or immaterial matters;
    (3) Involves unwarranted attempts to pry into a party's preparation 
for trial; or
    (4) Is being conducted in bad faith or in such manner as to 
unreasonably annoy, embarrass, or oppress the witness.
    (g) Fees. Deposition witnesses, including expert witnesses, shall 
be paid the same expenses in the same manner as are paid witnesses in 
the district courts of the United States in proceedings in which the 
United States is a party. Expenses in accordance with this paragraph 
shall be paid by the party seeking to take the deposition.


Sec.  19.171  Deposition subpoenas.

    (a) Issuance. At the request of a party, the administrative law 
judge shall issue a subpoena requiring the attendance of a witness at a 
discovery deposition under paragraph (a) of this section. The 
attendance of a witness may be required from any place in any state or 
territory that is subject to the jurisdiction of the United States or 
as otherwise permitted by law.
    (b) Service--(1) Methods of service. The party requesting the 
subpoena must serve it on the person named therein, or on that person's 
counsel, by any of the methods identified in Sec.  19.11(d).
    (2) Proof of service. The party serving the subpoena must file 
proof of service with the administrative law judge.
    (c) Motion to quash. A person named in a subpoena may file a motion 
to quash or modify the subpoena. A statement of the reasons for the 
motion must accompany it and a copy of the motion must be served on the 
party which requested the subpoena. The motion must be made prior to 
the time for compliance specified in the subpoena and not more than ten 
days after the date of service of the subpoena, or if the subpoena is 
served within 15 days of the hearing, within five days after the date 
of service.
    (d) Enforcement of deposition subpoena. Enforcement of a deposition 
subpoena shall be in accordance with the procedures of Sec.  19.27(d).

Subpart J--Formal Investigations


Sec.  19.180  Scope.

    This subpart and Sec.  19.8 apply to formal investigations 
initiated by order of the Comptroller or the Comptroller's delegate and 
pertain to the exercise of powers specified in 12 U.S.C. 481, 1818(n) 
and 1820(c), and section 21 of the Exchange Act (15 U.S.C. 78u). This 
subpart does not restrict or in any way affect the authority of the 
Comptroller to conduct examinations into the affairs or ownership of 
banks and their affiliates.


Sec.  19.181  Confidentiality of formal investigations.

    Information or documents obtained in the course of a formal 
investigation are confidential and may be disclosed only in accordance 
with the provisions of part 4 of this chapter.


Sec.  19.182  Order to conduct a formal investigation.

    A formal investigation begins with the issuance of an order signed 
by the Comptroller or the Comptroller's delegate. The order must 
designate the person or persons who will conduct the investigation. 
Such persons are authorized, among other things, to issue subpoenas 
duces tecum, to administer oaths, and receive affirmations as to any 
matter under investigation by the Comptroller. Upon application and for 
good cause shown, the Comptroller may limit, modify, or withdraw the 
order at any stage of the proceedings.


Sec.  19.183  Rights of witnesses.

    (a) Any person who is compelled or requested to furnish testimony, 
documentary evidence, or other information with respect to any matter 
under formal investigation shall, on request, be shown the order 
initiating the investigation.
    (b) Any person who, in a formal investigation, is compelled to 
appear and testify, or who appears and testifies by request or 
permission of the Comptroller, may be accompanied, represented, and 
advised by counsel. The right to be accompanied, represented, and 
advised by counsel means the right of a person testifying to have an 
attorney present at all times while testifying and to have the 
attorney--
    (1) Advise the person before, during and after the conclusion of 
testimony;

[[Page 89886]]

    (2) Question the person briefly at the conclusion of testimony to 
clarify any of the answers given; and
    (3) Make summary notes during the testimony solely for the use of 
the person.
    (c) Any person who has given or will give testimony and counsel 
representing the person may be excluded from the proceedings during the 
taking of testimony of any other witness.
    (d) Any person who is compelled to give testimony is entitled to 
inspect any transcript that has been made of the testimony but may not 
obtain a copy if the Comptroller's representatives conducting the 
proceedings have cause to believe that the contents should not be 
disclosed pending completion of the investigation.
    (e) Any designated representative conducting an investigative 
proceeding shall report to the Comptroller any instances where a person 
has been guilty of dilatory, obstructionist or insubordinate conduct 
during the course of the proceeding or any other instance involving a 
violation of this part. The Comptroller may take such action as the 
circumstances warrant, including exclusion of the offending individual 
or individuals from participation in the proceedings.


Sec.  19.184  Service of subpoena and payment of witness expenses.

    (a) Methods of service. Service of a subpoena may be made by any of 
the methods identified in Sec.  19.11(d).
    (b) Expenses. A witness who is subpoenaed will be paid the same 
expenses in the same manner as witnesses in the district courts of the 
United States. The expenses need not be tendered at the time a subpoena 
is served.

Subpart K--Parties and Representational Practice Before the OCC; 
Standards of Conduct


Sec.  19.190  Scope.

    This subpart contains rules relating to parties and 
representational practice before the OCC. This subpart includes the 
imposition of sanctions by the administrative law judge, any other 
presiding officer appointed pursuant to subparts C and D of this part, 
or the Comptroller against parties or their counsel in an adjudicatory 
proceeding under this part. This subpart also covers other disciplinary 
sanctions--censure, suspension or debarment--against individuals who 
appear before the OCC in a representational capacity either in an 
adjudicatory proceeding under this part or in any other matters 
connected with presentations to the OCC relating to a client's rights, 
privileges, or liabilities. This representation includes, but is not 
limited to, the practice of attorneys and accountants. Employees of the 
OCC are not subject to disciplinary proceedings under this subpart.


Sec.  19.191  Definitions.

    As used in Sec. Sec.  19.190 through 19.201, the following terms 
shall have the meaning given in this section unless the context 
otherwise requires:
    (a) Practice before the OCC includes any matters connected with 
presentations to the OCC or any of its officers or employees relating 
to a client's rights, privileges or liabilities under laws or 
regulations administered by the OCC. Such matters include, but are not 
limited to, representation of a client in an adjudicatory proceeding 
under this part; the preparation of any statement, opinion or other 
paper or document by an attorney, accountant, or other licensed 
professional which is filed with, or submitted to, the OCC, on behalf 
of another person in, or in connection with, any application, 
notification, report or document; the representation of a person at 
conferences, hearings and meetings; and the transaction of other 
business before the OCC on behalf of another person. The term 
``practice before the OCC'' does not include work prepared for a bank 
solely at its request for use in the ordinary course of its business.
    (b) Attorney means any individual who is a member in good standing 
of the bar of the highest court of any state, possession, territory, 
commonwealth, of the United States or the District of Columbia.
    (c) Accountant means any individual who is duly qualified to 
practice as a certified public accountant or a public accountant in any 
state, possession, territory, commonwealth of the United States, or the 
District of Columbia.


Sec.  19.192  Sanctions relating to conduct in an adjudicatory 
proceeding.

    (a) General rule. Appropriate sanctions may be imposed when any 
party or person representing a party in an adjudicatory proceeding 
under this part has failed to comply with an applicable statute, 
regulation, or order, and that failure to comply:
    (1) Constitutes contemptuous conduct;
    (2) Materially injures or prejudices another party in terms of 
substantive injury, incurring additional expenses including attorney's 
fees, prejudicial delay, or otherwise;
    (3) Is a clear and unexcused violation of an applicable statute, 
regulation, or order; or
    (4) Unduly delays the proceeding.
    (b) Sanctions. Sanctions which may be imposed include any one or 
more of the following:
    (1) Issuing an order against the party;
    (2) Rejecting or striking any testimony or documentary evidence 
offered, or other papers filed, by the party;
    (3) Precluding the party from contesting specific issues or 
findings;
    (4) Precluding the party from offering certain evidence or from 
challenging or contesting certain evidence offered by another party;
    (5) Precluding the party from making a late filing or conditioning 
a late filing on any terms that are just; and
    (6) Assessing reasonable expenses, including attorney's fees, 
incurred by any other party as a result of the improper action or 
failure to act.
    (c) Procedure for imposition of sanctions. (1) Upon the motion of 
any party, or on his or her own motion, the administrative law judge or 
other presiding officer may impose sanctions in accordance with this 
section. The administrative law judge or other presiding officer shall 
submit to the Comptroller for final ruling any sanction entering a 
final order that determines the case on the merits.
    (2) No sanction authorized by this section, other than refusal to 
accept late filings, shall be imposed without prior notice to all 
parties and an opportunity for any party against whom sanctions would 
be imposed to be heard. Such opportunity to be heard may be on such 
notice, and the response may be in such form as the administrative law 
judge or other presiding officer directs. The administrative law judge 
or other presiding officer may limit the opportunity to be heard to an 
opportunity of a party or a party's representative to respond orally 
immediately after the act or inaction covered by this section is noted 
by the administrative law judge or other presiding officer.
    (3) Requests for the imposition of sanctions by any party, and the 
imposition of sanctions, are subject to interlocutory review pursuant 
to Sec.  19.25 in the same manner as any other ruling.
    (d) Section not exclusive. Nothing in this section shall be read as 
precluding the administrative law judge or other presiding officer or 
the Comptroller from taking any other action, or imposing any 
restriction or sanction, authorized by applicable statute or 
regulation.

[[Page 89887]]

Sec.  19.193  Censure, suspension or debarment.

    The Comptroller may censure an individual or suspend or debar such 
individual from practice before the OCC if he or she is incompetent in 
representing a client's rights or interest in a significant matter 
before the OCC; or engages, or has engaged, in disreputable conduct; or 
refuses to comply with the rules and regulations in this part; or with 
intent to defraud in any manner, willfully and knowingly deceives, 
misleads, or threatens any client or prospective client. The suspension 
or debarment of an individual may be initiated only upon a finding by 
the Comptroller that the basis for the disciplinary action is 
sufficiently egregious.


Sec.  19.194  Eligibility of attorneys and accountants to practice.

    (a) Attorneys. Any attorney who is qualified to practice as an 
attorney and is not currently under suspension or debarment pursuant to 
this subpart may practice before the OCC.
    (b) Accountants. Any accountant who is qualified to practice as a 
certified public accountant or public accountant and is not currently 
under suspension or debarment by the OCC may practice before the OCC.


Sec.  19.195  Incompetence.

    Incompetence in the representation of a client's rights and 
interests in a significant matter before the OCC is grounds for 
suspension or debarment. The term ``incompetence'' encompasses conduct 
that reflects a lack of the knowledge, judgment and skill that a 
professional would ordinarily and reasonably be expected to exercise in 
adequately representing the rights and interests of a client. Such 
conduct includes, but is not limited to:
    (a) Handling a matter which the individual knows or should know 
that he or she is not competent to handle, without associating with a 
professional who is competent to handle such matter.
    (b) Handling a matter without adequate preparation under the 
circumstances.
    (c) Neglect in a matter entrusted to him or her.


Sec.  19.196  Disreputable conduct.

    Disreputable conduct for which an individual may be censured, 
debarred, or suspended from practice before the OCC includes:
    (a) Willfully or recklessly violating or willfully or recklessly 
aiding and abetting the violation of any provision of the Federal 
banking or applicable securities laws or the rules and regulations 
thereunder or conviction of any offense involving dishonesty or breach 
of trust;
    (b) Knowingly or recklessly giving false or misleading information, 
or participating in any way in the giving of false information to the 
OCC or any officer or employee thereof, or to any tribunal authorized 
to pass upon matters administered by the OCC in connection with any 
matter pending or likely to be pending before it. The term 
``information'' includes facts or other statements contained in 
testimony, financial statements, applications for enrollment, 
affidavits, declarations, or any other document or written or oral 
statement;
    (c) Directly or indirectly attempting to influence, or offering or 
agreeing to attempt to influence, the official action of any officer or 
employee of the OCC by the use of threats, false accusations, duress or 
coercion, by the offer of any special inducement or promise of 
advantage or by the bestowing of any gift, favor, or thing of value.
    (d) Disbarment or suspension from practice as an attorney, or 
debarment or suspension from practice as a certified public accountant 
or public accountant, by any duly constituted authority of any state, 
possession, or commonwealth of the United States, or the District of 
Columbia for the conviction of a felony or misdemeanor involving moral 
turpitude in matters relating to the supervisory responsibilities of 
the OCC, where the conviction has not been reversed on appeal.
    (e) Knowingly aiding or abetting another individual to practice 
before the OCC during that individual's period of suspension, 
debarment, or ineligibility.
    (f) Contemptuous conduct in connection with practice before the 
OCC, and knowingly making false accusations and statements, or 
circulating or publishing malicious or libelous matter.
    (g) Suspension, debarment or removal from practice before the Board 
of Governors, the FDIC, the OTS, the Securities and Exchange 
Commission, the Commodity Futures Trading Commission, or any other 
Federal or state agency; and
    (h) Willful violation of any of the regulations contained in this 
part.


Sec.  19.197  Initiation of disciplinary proceeding.

    (a) Receipt of information. An individual, including any employee 
of the OCC, who has reason to believe that an individual practicing 
before the OCC in a representative capacity has engaged in any conduct 
that would serve as a basis for censure, suspension or debarment under 
Sec.  19.192, may make a report thereof and forward it to the OCC or to 
such person as may be delegated responsibility for such matters by the 
Comptroller.
    (b) Censure without formal proceeding. Upon receipt of information 
regarding an individual's qualification to practice before the OCC, the 
Comptroller or the Comptroller's delegate may, after giving the 
individual notice and opportunity to respond, censure such individual.
    (c) Institution of formal disciplinary proceeding. When the 
Comptroller has reason to believe that any individual who practices 
before the OCC in a representative capacity has engaged in conduct that 
would serve as a basis for censure, suspension or debarment under Sec.  
19.192, the Comptroller may, after giving the individual notice and 
opportunity to respond, institute a formal disciplinary proceeding 
against such individual. The proceeding will be conducted pursuant to 
Sec.  19.199 and initiated by a complaint which names the individual as 
a respondent and is signed by the Comptroller or the Comptroller's 
delegate. Except in cases of willfulness, or when time, the nature of 
the proceeding, or the public interest do not permit, a proceeding 
under this section may not be commenced until the respondent has been 
informed, in writing, of the facts or conduct which warrant institution 
of a proceeding and the respondent has been accorded the opportunity to 
comply with all lawful requirements or take whatever action may be 
necessary to remedy the conduct that is the basis for the commencement 
of the proceeding.


Sec.  19.198  Conferences.

    (a) General. The Comptroller may confer with a proposed respondent 
concerning allegations of misconduct or other grounds for censure, 
debarment or suspension, regardless of whether a proceeding for 
debarment or suspension has been commenced. If a conference results in 
a stipulation in connection with a proceeding in which the individual 
is the respondent, the stipulation may be entered in the record at the 
request of either party to the proceeding.
    (b) Resignation or voluntary suspension. In order to avoid the 
institution of, or a decision in, a debarment or suspension proceeding, 
a person who practices before the OCC may consent to suspension from 
practice. At the discretion of the Comptroller, the individual may be 
suspended or debarred in accordance with the consent offered.

[[Page 89888]]

Sec.  19.199  Proceedings under this subpart.

    Any hearing held under this subpart is held before an 
administrative law judge pursuant to procedures set forth in subpart A 
of this part. The Comptroller or the Comptroller's delegate shall 
appoint a person to represent the OCC in the hearing. Any person having 
prior involvement in the matter which is the basis for the suspension 
or debarment proceeding is disqualified from representing the OCC in 
the hearing. The hearing will be closed to the public unless the 
Comptroller on his or her own initiative, or on the request of a party, 
otherwise directs. The administrative law judge shall issue a 
recommended decision to the Comptroller who shall issue the final 
decision and order. The Comptroller may censure, debar or suspend an 
individual, or take such other disciplinary action as the Comptroller 
deems appropriate.


Sec.  19.200  Effect of suspension, debarment or censure.

    (a) Debarment. If the final order against the respondent is for 
debarment, the individual may not practice before the OCC unless 
otherwise permitted to do so by the Comptroller.
    (b) Suspension. If the final order against the respondent is for 
suspension, the individual may not practice before the OCC during the 
period of suspension.
    (c) Censure. If the final order against the respondent is for 
censure, the individual may be permitted to practice before the OCC, 
but such individual's future representations may be subject to 
conditions designed to promote high standards of conduct. If a written 
letter of censure is issued, a copy will be maintained in the OCC's 
files.
    (d) Notice of debarment or suspension. Upon the issuance of a final 
order for suspension or debarment, the Comptroller shall give notice of 
the order to appropriate officers and employees of the OCC and to 
interested departments and agencies of the Federal government. The 
Comptroller or the Comptroller's delegate shall also give notice to the 
appropriate authorities of the state in which any debarred or suspended 
individual is or was licensed to practice.


Sec.  19.201  Petition for reinstatement.

    At the expiration of the period of time designated in the order of 
debarment, the Comptroller may entertain a petition for reinstatement 
from any person debarred from practice before the OCC. The Comptroller 
may grant reinstatement only if satisfied that the petitioner is likely 
to act in accordance with the regulations in this part, and that 
granting reinstatement would not be contrary to the public interest. 
Any request for reinstatement shall be limited to written submissions 
unless the Comptroller, in his or her discretion, affords the 
petitioner a hearing.

Subpart L--Equal Access to Justice Act


Sec.  19.210  Scope.

    The Equal Access to Justice Act regulations applicable to formal 
OCC adjudicatory proceedings under this part are set forth at 31 CFR 
part 6.

Subpart M--Procedures for Reclassifying a Bank Based on Criteria 
Other Than Capital


Sec.  19.220  Scope.

    This subpart applies to the procedures afforded to any bank that 
has been reclassified to a lower capital category by a notice or order 
issued by the OCC pursuant to section 38 of the Federal Deposit 
Insurance Act and this part.


Sec.  19.221  Reclassification of a bank based on unsafe or unsound 
condition or practice.

    (a) Issuance of notice of proposed reclassification--(1) Grounds 
for reclassification. (i) Pursuant to Sec.  6.4 of this chapter, the 
OCC may reclassify a well capitalized bank as adequately capitalized or 
subject an adequately capitalized bank or undercapitalized bank to the 
supervisory actions applicable to the next lower capital category if:
    (A) The OCC determines that the bank is in an unsafe or unsound 
condition; or
    (B) The OCC deems the bank to be engaging in an unsafe or unsound 
practice and not to have corrected the deficiency.
    (ii) Any action pursuant to this paragraph (a)(1) shall hereinafter 
be referred to as ``reclassification.''
    (2) Prior notice to institution. Prior to taking action pursuant to 
Sec.  6.4 of this chapter, the OCC shall issue and serve on the bank a 
written notice of the OCC's intention to reclassify the bank.
    (b) Contents of notice. A notice of intention to reclassify a bank 
based on unsafe or unsound condition will include:
    (1) A statement of the bank's capital measures and capital levels 
and the category to which the bank would be reclassified;
    (2) The reasons for reclassification of the bank;
    (3) The date by which the bank subject to the notice of 
reclassification may file with the OCC a written appeal of the proposed 
reclassification and a request for a hearing, which shall be at least 
14 calendar days from the date of service of the notice unless the OCC 
determines that a shorter period is appropriate in light of the 
financial condition of the bank or other relevant circumstances.
    (c) Response to notice of proposed reclassification. A bank may 
file a written response to a notice of proposed reclassification within 
the time period set by the OCC. The response should include:
    (1) An explanation of why the bank is not in unsafe or unsound 
condition or otherwise should not be reclassified;
    (2) Any other relevant information, mitigating circumstances, 
documentation, or other evidence in support of the position of the bank 
or company regarding the reclassification.
    (d) Failure to file response. Failure by a bank to file, within the 
specified time period, a written response with the OCC to a notice of 
proposed reclassification shall constitute a waiver of the opportunity 
to respond and shall constitute consent to the reclassification.
    (e) Request for hearing and presentation of oral testimony or 
witnesses. The response may include a request for an informal hearing 
before the OCC under this section. If the bank desires to present oral 
testimony or witnesses at the hearing, the bank shall include a request 
to do so with the request for an informal hearing. A request to present 
oral testimony or witnesses shall specify the names of the witnesses 
and the general nature of their expected testimony. Failure to request 
a hearing shall constitute a waiver of any right to a hearing, and 
failure to request the opportunity to present oral testimony or 
witnesses shall constitute a waiver of any right to present oral 
testimony or witnesses.
    (f) Order for informal hearing. Upon receipt of a timely written 
request that includes a request for a hearing, the OCC shall issue an 
order directing an informal hearing to commence no later than 30 days 
after receipt of the request, unless the OCC allows further time at the 
request of the bank. The hearing shall be held in Washington, DC or at 
such other place as may be designated by the OCC, before a presiding 
officer(s) designated by the OCC to conduct the hearing.
    (g) Hearing procedures. (1) The bank shall have the right to 
introduce relevant written materials and to present oral argument at 
the hearing. The bank may introduce oral testimony and present 
witnesses only if expressly authorized by the OCC or the presiding 
officer(s). Neither the provisions of the Administrative Procedure Act 
(5 U.S.C.

[[Page 89889]]

554-557) governing adjudications required by statute to be determined 
on the record nor the Uniform Rules of Practice and Procedure in 
subpart A of this part apply to an informal hearing under this section 
unless the OCC orders that such procedures shall apply.
    (2) The informal hearing shall be recorded, and a transcript 
furnished to the bank upon request and payment of the cost thereof. 
Witnesses need not be sworn, unless specifically requested by a party 
or the presiding officer(s). The presiding officer(s) may ask questions 
of any witness.
    (3) The presiding officer(s) may order that the hearing be 
continued for a reasonable period (normally five business days) 
following completion of oral testimony or argument to allow additional 
written submissions to the hearing record.
    (h) Recommendation of presiding officer(s). Within 20 calendar days 
following the date the hearing and the record on the proceeding are 
closed, the presiding officer(s) shall make a recommendation to the OCC 
on the reclassification.
    (i) Time for decision. Not later than 60 calendar days after the 
date the record is closed or the date of the response in a case where 
no hearing was requested, the OCC will decide whether to reclassify the 
bank and notify the bank of the OCC's decision.


Sec.  19.222  Request for rescission of reclassification.

    Any bank that has been reclassified under part 6 of this chapter 
and this subpart, may, upon a change in circumstances, request in 
writing that the OCC reconsider the reclassification, and may propose 
that the reclassification be rescinded and that any directives issued 
in connection with the reclassification be modified, rescinded, or 
removed. Unless otherwise ordered by the OCC, the bank shall remain 
subject to the reclassification and to any directives issued in 
connection with that reclassification while such request is pending 
before the OCC.

Subpart N--Order To Dismiss a Director or Senior Executive Officer


Sec.  19.230  Scope.

    This subpart applies to informal hearings afforded to any director 
or senior executive officer dismissed pursuant to an order issued under 
12 U.S.C. 1831o and part 6 of this chapter.


Sec.  19.231  Order to dismiss a director or senior executive officer.

    (a) Service of notice. When the OCC issues and serves a directive 
on a bank pursuant to subpart B of part 6 of this chapter requiring the 
bank to dismiss from office any director or senior executive officer 
under section 38(f)(2)(F)(ii) of the FDI Act, the OCC shall also serve 
a copy of the directive, or the relevant portions of the directive 
where appropriate, upon the person to be dismissed.
    (b) Response to directive--(1) Request for reinstatement. A 
director or senior executive officer who has been served with a 
directive under paragraph (a) of this section (Respondent) may file a 
written request for reinstatement. The request for reinstatement shall 
be filed within 10 calendar days of the receipt of the directive by the 
Respondent, unless further time is allowed by the OCC at the request of 
the Respondent.
    (2) Contents of request; informal hearing. The request for 
reinstatement shall include reasons why the Respondent should be 
reinstated, and may include a request for an informal hearing before 
the OCC or its designee under this section. If the Respondent desires 
to present oral testimony or witnesses at the hearing, the Respondent 
shall include a request to do so with the request for an informal 
hearing. The request to present oral testimony or witnesses shall 
specify the names of the witnesses and the general nature of their 
expected testimony. Failure to request a hearing shall constitute a 
waiver of any right to a hearing and failure to request the opportunity 
to present oral testimony or witnesses shall constitute a waiver of any 
right or opportunity to present oral testimony or witnesses.
    (3) Effective date. Unless otherwise ordered by the OCC, the 
dismissal shall remain in effect while a request for reinstatement is 
pending.
    (c) Order for informal hearing. Upon receipt of a timely written 
request from a Respondent for an informal hearing on the portion of a 
directive requiring a bank to dismiss from office any director or 
senior executive officer, the OCC shall issue an order directing an 
informal hearing to commence no later than 30 days after receipt of the 
request, unless the Respondent requests a later date. The hearing shall 
be held in Washington, DC, or at such other place as may be designated 
by the OCC, before a presiding officer(s) designated by the OCC to 
conduct the hearing.
    (d) Hearing procedures. (1) A Respondent may appear at the hearing 
personally or through counsel. A Respondent shall have the right to 
introduce relevant written materials and to present oral argument. A 
Respondent may introduce oral testimony and present witnesses only if 
expressly authorized by the OCC or the presiding officer(s). Neither 
the provisions of the Administrative Procedure Act governing 
adjudications required by statute to be determined on the record nor 
the Uniform Rules of Practice and Procedure in subpart A of this part 
apply to an informal hearing under this section unless the OCC orders 
that such procedures shall apply.
    (2) The informal hearing shall be recorded, and a transcript 
furnished to the Respondent upon request and payment of the cost 
thereof. Witnesses need not be sworn, unless specifically requested by 
a party or the presiding officer(s). The presiding officer(s) may ask 
questions of any witness.
    (3) The presiding officer(s) may order that the hearing be 
continued for a reasonable period (normally five business days) 
following completion of oral testimony or argument to allow additional 
written submissions to the hearing record.
    (e) Standard for review. A Respondent shall bear the burden of 
demonstrating that his or her continued employment by or service with 
the bank would materially strengthen the bank's ability:
    (1) To become adequately capitalized, to the extent that the 
directive was issued as a result of the bank's capital level or failure 
to submit or implement a capital restoration plan; and
    (2) To correct the unsafe or unsound condition or unsafe or unsound 
practice, to the extent that the directive was issued as a result of 
classification of the bank based on supervisory criteria other than 
capital, pursuant to section 38(g) of the FDI Act.
    (f) Recommendation of presiding officer. Within 20 calendar days 
following the date the hearing and the record on the proceeding are 
closed, the presiding officer(s) shall make a recommendation to the OCC 
concerning the Respondent's request for reinstatement with the bank.
    (g) Time for decision. Not later than 60 calendar days after the 
date the record is closed or the date of the response in a case where 
no hearing was requested, the OCC shall grant or deny the request for 
reinstatement and notify the Respondent of the OCC's decision. If the 
OCC denies the request for reinstatement, the OCC shall set forth in 
the notification the reasons for the OCC's action.

Subpart O--Civil Money Penalty Adjustments


Sec.  19.240  Inflation adjustments.

    (a) Statutory formula to calculate inflation adjustments. The OCC 
is required by statute to annually adjust

[[Page 89890]]

for inflation the maximum amount of each civil money penalty within its 
jurisdiction to administer. The inflation adjustment is calculated by 
multiplying the maximum dollar amount of the civil money penalty for 
the previous calendar year by the cost-of-living inflation adjustment 
multiplier provided annually by the Office of Management and Budget and 
rounding the total to the nearest dollar.
    (b) Notice of inflation adjustments. The OCC will publish notice in 
the Federal Register of the maximum penalties which may be assessed on 
an annual basis on or before January 15 of each calendar year based on 
the formula in paragraph (a) of this section, for penalties assessed 
on, or after, the date of publication of the most recent notice related 
to conduct occurring on, or after, November 2, 2015.

Subpart P--Removal, Suspension, and Debarment of Accountants From 
Performing Audit Services


Sec.  19.241  Scope.

    This subpart, which implements section 36(g)(4) of the FDIA (12 
U.S.C. 1831m(g)(4)), provides rules and procedures for the removal, 
suspension, or debarment of independent public accountants and their 
accounting firms from performing independent audit and attestation 
services required by section 36 of the FDIA (12 U.S.C. 1831m) for 
insured national banks, insured Federal savings associations, and 
insured Federal branches of foreign banks.


Sec.  19.242  Definitions.

    As used in this subpart, the following terms have the meaning given 
below unless the context requires otherwise:
    (a) Accounting firm means a corporation, proprietorship, 
partnership, or other business firm providing audit services.
    (b) Audit services means any service required to be performed by an 
independent public accountant by section 36 of the FDIA (12 U.S.C. 
1831m) and 12 CFR part 363, including attestation services.
    (c) Independent public accountant (accountant) means any individual 
who performs or participates in providing audit services.


Sec.  19.243  Removal, suspension, or debarment.

    (a) Good cause for removal, suspension, or debarment--(1) 
Individuals. The Comptroller may remove, suspend, or debar an 
independent public accountant from performing audit services for 
insured national banks, insured Federal savings associations, or 
insured Federal branches of foreign banks that are subject to section 
36 of the FDIA (12 U.S.C. 1831m) if, after service of a notice of 
intention and opportunity for hearing in the matter, the Comptroller 
finds that the accountant:
    (i) Lacks the requisite qualifications to perform audit services;
    (ii) Has knowingly or recklessly engaged in conduct that results in 
a violation of applicable professional standards, including those 
standards and conflicts of interest provisions applicable to 
accountants through the Sarbanes-Oxley Act of 2002, Public Law 107-204, 
116 Stat. 745 (2002) (Sarbanes-Oxley Act), and developed by the Public 
Company Accounting Oversight Board and the Securities and Exchange 
Commission;
    (iii) Has engaged in negligent conduct in the form of:
    (A) A single instance of highly unreasonable conduct that results 
in a violation of applicable professional standards in circumstances in 
which an accountant knows, or should know, that heightened scrutiny is 
warranted; or
    (B) Repeated instances of unreasonable conduct, each resulting in a 
violation of applicable professional standards, that indicate a lack of 
competence to perform audit services;
    (iv) Has knowingly or recklessly given false or misleading 
information, or knowingly or recklessly participated in any way in the 
giving of false or misleading information, to the OCC or any officer or 
employee of the OCC;
    (v) Has engaged in, or aided and abetted, a material and knowing or 
reckless violation of any provision of the Federal banking or 
securities laws or the rules and regulations thereunder, or any other 
law;
    (vi) Has been removed, suspended, or debarred from practice before 
any Federal or State agency regulating the banking, insurance, or 
securities industries, other than by an action listed in Sec.  19.244, 
on grounds relevant to the provision of audit services; or
    (vii) Is suspended or debarred for cause from practice as an 
accountant by any duly constituted licensing authority of any State, 
possession, commonwealth, or the District of Columbia.
    (2) Accounting firms. If the Comptroller determines that there is 
good cause for the removal, suspension, or debarment of a member or 
employee of an accounting firm under paragraph (a)(1) of this section, 
the Comptroller also may remove, suspend, or debar such firm or one or 
more offices of such firm. In considering whether to remove, suspend, 
or debar a firm or an office thereof, and the term of any sanction 
against a firm under this section, the Comptroller may consider, for 
example:
    (i) The gravity, scope, or repetition of the act or failure to act 
that constitutes good cause for the removal, suspension, or debarment;
    (ii) The adequacy of, and adherence to, applicable policies, 
practices, or procedures for the accounting firm's conduct of its 
business and the performance of audit services;
    (iii) The selection, training, supervision, and conduct of members 
or employees of the accounting firm involved in the performance of 
audit services;
    (iv) The extent to which managing partners or senior officers of 
the accounting firm have participated, directly, or indirectly through 
oversight or review, in the act or failure to act; and
    (v) The extent to which the accounting firm has, since the 
occurrence of the act or failure to act, implemented corrective 
internal controls to prevent its recurrence.
    (3) Limited scope orders. An order of removal, suspension 
(including an immediate suspension), or debarment may, at the 
discretion of the Comptroller, be made applicable to a particular 
insured national bank, insured Federal savings association, or insured 
Federal branch of a foreign bank or class of insured national banks, 
insured Federal savings associations, or insured Federal branches of 
foreign banks.
    (4) Remedies not exclusive. The remedies provided in this subpart 
are in addition to any other remedies the OCC may have under any other 
applicable provisions of law, rule, or regulation.
    (b) Proceedings to remove, suspend, or debar--(1) Initiation of 
formal removal, suspension, or debarment proceedings. The Comptroller 
may initiate a proceeding to remove, suspend, or debar an accountant or 
accounting firm from performing audit services by issuing a written 
notice of intention to take such action that names the individual or 
firm as a respondent and describes the nature of the conduct that 
constitutes good cause for such action.
    (2) Hearings under paragraph (b) of this section. An accountant or 
firm named as a respondent in the notice issued under paragraph (b)(1) 
of this section may request a hearing on the allegations in the notice. 
Hearings conducted under this paragraph will be conducted in the same 
manner as other hearings under the Uniform Rules of Practice and 
Procedure (12 CFR part 19, subpart A), subject to the limitations in 
Sec.  19.243(c)(4).

[[Page 89891]]

    (c) Immediate suspension from performing audit services--(1) In 
general. If the Comptroller serves a written notice of intention to 
remove, suspend, or debar an accountant or accounting firm from 
performing audit services, the Comptroller may, with due regard for the 
public interest and without a preliminary hearing, immediately suspend 
such accountant or firm from performing audit services for insured 
national banks, insured Federal savings associations, or insured 
Federal branches of foreign banks, if the Comptroller:
    (i) Has a reasonable basis to believe that the accountant or firm 
has engaged in conduct (specified in the notice served on the 
accountant or firm under paragraph (b) of this section) that would 
constitute grounds for removal, suspension, or debarment under 
paragraph (a) of this section;
    (ii) Determines that immediate suspension is necessary to avoid 
immediate harm to an insured depository institution or its depositors 
or to the depository system as a whole; and
    (iii) Serves such respondent with written notice of the immediate 
suspension.
    (2) Procedures. An immediate suspension notice issued under this 
paragraph will become effective upon service. Such suspension will 
remain in effect until the date the Comptroller dismisses the charges 
contained in the notice of intention, or the effective date of a final 
order of removal, suspension, or debarment issued by the Comptroller to 
the respondent.
    (3) Petition for stay. Any accountant or firm immediately suspended 
from performing audit services in accordance with paragraph (c)(1) of 
this section may, within 10 calendar days after service of the notice 
of immediate suspension, file with the Office of the Comptroller of the 
Currency, Washington, DC 20219 for a stay of such immediate suspension. 
If no petition is filed within 10 calendar days, the right to a 
petition is waived and the immediate suspension remains in effect 
pursuant to paragraph (c)(2).
    (4) Hearing on petition. Upon receipt of a stay petition, the 
Comptroller will designate a presiding officer who will fix a place and 
time (not more than 10 calendar days after receipt of the petition, 
unless further time is allowed by the presiding officer at the request 
of petitioner) at which the immediately suspended party may appear, 
personally or through counsel, to submit written materials and oral 
argument. Any OCC employee engaged in investigative or prosecuting 
functions for the OCC in a case may not, in that or a factually related 
case, serve as a presiding officer or participate or advise in the 
decision of the presiding officer or of the OCC, except as witness or 
counsel in the proceeding. In the sole discretion of the presiding 
officer, upon a specific showing of compelling need, oral testimony of 
witnesses may also be presented. In hearings held pursuant to this 
paragraph there will be no discovery and the provisions of Sec. Sec.  
19.6 through 19.12, 19.16, and 19.21 of this part apply.
    (5) Decision on petition. Within 30 calendar days after the 
hearing, the presiding officer will issue a decision. The presiding 
officer will grant a stay upon a demonstration that a substantial 
likelihood exists of the respondent's success on the issues raised by 
the notice of intention and that, absent such relief, the respondent 
will suffer immediate and irreparable injury, loss, or damage. In the 
absence of such a demonstration, the presiding officer will notify the 
parties that the immediate suspension will be continued pending the 
completion of the administrative proceedings pursuant to the notice.
    (6) Review of presiding officer's decision. The parties may seek 
review of the presiding officer's decision by filing a petition for 
review with the presiding officer within 10 calendar days after service 
of the decision. Replies must be filed within 10 calendar days after 
the petition filing date. Upon receipt of a petition for review and any 
reply, the presiding officer will promptly certify the entire record to 
the Comptroller. Within 60 calendar days of the presiding officer's 
certification, the Comptroller will issue an order notifying the 
affected party whether or not the immediate suspension should be 
continued or reinstated. The order will state the basis of the 
Comptroller's decision.


Sec.  19.244  Automatic removal, suspension, or debarment.

    (a) An independent public accountant or accounting firm may not 
perform audit services for insured national banks, insured Federal 
savings associations, or insured Federal branches of foreign banks if 
the accountant or firm:
    (1) Is subject to a final order of removal, suspension, or 
debarment (other than a limited scope order) issued by the Board of 
Governors of the Federal Reserve System, the Federal Deposit Insurance 
Corporation, or the former Office of Thrift Supervision under section 
36 of the FDIA (12 U.S.C. 1831m).
    (2) Is subject to a temporary suspension or permanent revocation of 
registration or a temporary or permanent suspension or bar from further 
association with any registered public accounting firm issued by the 
Public Company Accounting Oversight Board or the Securities and 
Exchange Commission under sections 105(c)(4)(A) or (B) of the Sarbanes-
Oxley Act (15 U.S.C. 7215(c)(4)(A) or (B)); or
    (3) Is subject to an order of suspension or denial of the privilege 
of appearing or practicing before the Securities and Exchange 
Commission.
    (b) Upon written request, the Comptroller, for good cause shown, 
may grant written permission to such accountant or firm to perform 
audit services for insured national banks, insured Federal savings 
associations, or insured Federal branches of foreign banks. The request 
must contain a concise statement of the action requested. The 
Comptroller may require the applicant to submit additional information.


Sec.  19.245  Notice of removal, suspension, or debarment.

    (a) Notice to the public. Upon the issuance of a final order for 
removal, suspension, or debarment of an independent public accountant 
or accounting firm from providing audit services, the Comptroller will 
make the order publicly available and provide notice of the order to 
the other Federal banking agencies.
    (b) Notice to the Comptroller by accountants and firms. An 
accountant or accounting firm that provides audit services to a insured 
national bank, insured Federal savings association, or insured Federal 
branch of a foreign bank must provide the Comptroller with written 
notice of:
    (1) Any currently effective order or other action described in 
Sec.  19.243(a)(1)(vi) through (vii) or Sec.  19.244(a)(2) and (3); and
    (2) Any currently effective action by the Public Company Accounting 
Oversight Board under sections 105(c)(4)(C) or (G) of the Sarbanes-
Oxley Act (15 U.S.C. 7215(c)(4)(C) or (G)).
    (c) Timing of notice. Written notice required by this paragraph 
must be given no later than 15 calendar days following the effective 
date of an order or action, or 15 calendar days before an accountant or 
firm accepts an engagement to provide audit services, whichever date is 
earlier.


Sec.  19.246  Petition for reinstatement.

    (a) Form of petition. Unless otherwise ordered by the Comptroller, 
a petition for reinstatement by an independent

[[Page 89892]]

public accountant, an accounting firm, or an office of a firm that was 
removed, suspended, or debarred under Sec.  19.243 may be made in 
writing at any time. The request must contain a concise statement of 
the action requested. The Comptroller may require the applicant to 
submit additional information.
    (b) Procedure. A petitioner for reinstatement under this section 
may, in the sole discretion of the Comptroller, be afforded a hearing. 
The accountant or firm bears the burden of going forward with a 
petition and proving the grounds asserted in support of the petition. 
In reinstatement proceedings, the person seeking reinstatement bears 
the burden of going forward with an application and proving the grounds 
asserted in support of the application. The Comptroller may, in his 
sole discretion, direct that any reinstatement proceeding be limited to 
written submissions. The removal, suspension, or debarment will 
continue until the Comptroller, for good cause shown, has reinstated 
the petitioner or until the suspension period has expired. The filing 
of a petition for reinstatement will not stay the effectiveness of the 
removal, suspension, or debarment of an accountant or firm.

PART 108--REMOVALS, SUSPENSIONS, AND PROHIBITIONS WHERE A CRIME IS 
CHARGED OR PROVEN

    Authority: 12 U.S.C. 1464, 1818, 5412(b)(2)(B).


Sec.  108.1  Scope.

    The rules in this part apply to hearings, which are exempt from the 
adjudicative provisions of the Administrative Procedure Act, afforded 
to any officer, director, or other person participating in the conduct 
of the affairs of a Federal savings association, Federal savings 
association subsidiary, or affiliate service corporation, where such 
person has been suspended or removed from office or prohibited from 
further participation in the conduct of the affairs of one of the 
aforementioned entities by a Notice or Order served by the OCC upon the 
grounds set forth in section 8(g) of the Federal Deposit Insurance Act, 
(12 U.S.C. 1818(g)).


Sec.  108.2  Definitions.

    As used in this part--
    (a) The term OCC means the Office of the Comptroller of the 
Currency.
    (b) [Reserved]
    (c) The term Notice means a Notice of Suspension or Notice of 
Prohibition issued by the OCC pursuant to section 8(g) of the Federal 
Deposit Insurance Act.
    (d) The term Order means an Order of Removal or Order of 
Prohibition issued by the OCC pursuant to section 8(g) of the Federal 
Deposit Insurance Act.
    (e) The term association means a Federal savings association within 
the meaning of section 2(5) of the Home Owners' Loan Act of 1933, as 
amended, 12 U.S.C. 1462(5) (``HOLA''), Federal savings association 
subsidiary and an affiliate service corporation within the meaning of 
section 8(b)(8) of the Federal Deposit Insurance Act, as amended, 12 
U.S.C. 1818(b)(8) (``FDIA'').
    (f) The term subject individual means a person served with a Notice 
or Order.
    (g) The term petitioner means a subject individual who has filed a 
petition for informal hearing under this part.


Sec.  108.3  Issuance of Notice or Order.

    (a) The OCC may issue and serve a Notice upon an officer, director, 
or other person participating in the conduct of the affairs of an 
association, where the individual is charged in any information, 
indictment, or complaint with the commission of or participation in a 
crime involving dishonesty or breach of trust that is punishable by 
imprisonment for a term exceeding one year under state or Federal law, 
if the OCC, upon due deliberation, determines that continued service or 
participation by the individual may pose a threat to the interests of 
the association's depositors or may threaten to impair public 
confidence in the association. The Notice shall remain in effect until 
the information, indictment, or complaint is finally disposed of or 
until terminated by the OCC.
    (b) The OCC may issue and serve an Order upon a subject individual 
against whom a judgment of conviction, or an agreement to enter a 
pretrial diversion or other similar program has been rendered, where 
such judgment is not subject to further appellate review, and the OCC, 
upon the deliberation, has determined that continued service or 
participation by the subject individual may pose a threat to the 
interests of the association's depositors or may threaten to impair 
public confidence in the association.


Sec.  108.4  Contents and service of the Notice or Order.

    (a) The Notice or Order shall set forth the basis and facts in 
support of the OCC's issuance of such Notice or Order, and shall inform 
the subject individual of his right to a hearing, in accordance with 
this part, for the purpose of determining whether the Notice or Order 
should be continued, terminated, or otherwise modified.
    (b) The OCC shall serve a copy of the Notice or Order upon the 
subject individual and the related association in the manner set forth 
in Sec.  109.11 of this chapter.
    (c) Upon receipt of the Notice or Order, the subject individual 
shall immediately comply with the requirements thereof.


Sec.  108.5  Petition for hearing.

    (a) To obtain a hearing, the subject individual must file two 
copies of a petition with the OCC within 30 days of being served with 
the Notice or Order.
    (b) The petition filed under this section shall admit or deny 
specifically each allegation in the Notice or Order, unless the 
petitioner is without knowledge or information, in which case the 
petition shall so state and the statement shall have the effect of a 
denial. Any allegation not denied shall be deemed to be admitted. When 
a petitioner intends in good faith to deny only a part of or to qualify 
an allegation, he shall specify so much of it as is true and shall deny 
only the remainder.
    (c) The petition shall state whether the petitioner is requesting 
termination or modification of the Notice or Order, and shall state 
with particularity how the petitioner intends to show that his 
continued service to or participation in the conduct of the affairs of 
the association would not, or is not likely to, pose a threat to the 
interests of the association's depositors or to impair public 
confidence in the association.


Sec.  108.6  Initiation of hearing.

    (a) Within 10 days of the filing of a petition for hearing, the OCC 
shall notify the petitioner of the time and place fixed for hearing, 
and it shall designate one or more OCC employees to serve as presiding 
officer.
    (b) The hearing shall be scheduled to be held no later than 30 days 
from the date the petition was filed, unless the time is extended at 
the request of the petitioner.
    (c) A petitioner may appear personally or through counsel, but if 
represented by counsel, said counsel is required to comply with Sec.  
109.6 of this chapter.
    (d) A representative(s) of the OCC's Enforcement Division also may 
attend the hearing and participate therein as a party.


Sec.  108.7  Conduct of hearings.

    (a) Hearings provided by this section are not subject to the 
adjudicative provisions of the Administrative Procedure Act (5 U.S.C. 
554-557). The presiding officer is, however, authorized to exercise all 
of the powers enumerated in Sec.  109.5 of this chapter.

[[Page 89893]]

    (b) Witnesses may be presented, within time limits specified by the 
presiding officer, provided that at least 10 days prior to the hearing 
date, the party presenting the witnesses furnishes the presiding 
officer and the opposing party with a list of such witnesses and a 
summary of the proposed testimony. However, the requirement for 
furnishing such a witness list and summary of testimony shall not apply 
to the presentation of rebuttal witnesses. The presiding officer may 
ask questions of any witness, and each party shall have an opportunity 
to cross-examine any witness presented by an opposing party.
    (c) Upon the request of either the petitioner or a representative 
of the Enforcement Division, the record shall remain open for a period 
of 5 business days following the hearing, during which time the parties 
may make any additional submissions for the record. Thereafter, the 
record shall be closed.
    (d) Following the introduction of all evidence, the petitioner and 
the representative of the Enforcement Division shall have an 
opportunity for oral argument; however, the parties may jointly waive 
the right to oral argument, and, in lieu thereof, elect to submit 
written argument.
    (e) All oral testimony and oral argument shall be recorded, and 
transcripts made available to the petitioner upon payment of the cost 
thereof. A copy of the transcript shall be sent directly to the 
presiding officer, who shall have authority to correct the record sua 
sponte or upon the motion of any party.
    (f) The parties may, in writing, jointly waive an oral hearing and 
instead elect a hearing upon a written record in which all evidence and 
argument would be submitted to the presiding officer in documentary 
form and statements of individuals would be made by affidavit.


Sec.  108.8  Default.

    If the subject individual fails to file a petition for a hearing, 
or fails to appear at a hearing, either in person or by attorney, or 
fails to submit a written argument where oral argument has been waived 
pursuant to Sec.  108.7(d) or (f) of this part, the Notice shall remain 
in effect until the information, indictment, or complaint is finally 
disposed of and the Order shall remain in effect until terminated by 
the OCC.


Sec.  108.9  Rules of evidence.

    (a) Formal rules of evidence shall not apply to a hearing, but the 
presiding officer may limit the introduction of irrelevant, immaterial, 
or unduly repetitious evidence.
    (b) All matters officially noticed by the presiding officer shall 
appear on the record.


Sec.  108.10  Burden of persuasion.

    The petitioner has the burden of showing, by a preponderance of the 
evidence, that his or her continued service to or participation in the 
conduct of the affairs of the association does not, or is not likely 
to, pose a threat to the interests of the association's depositors or 
threaten to impair public confidence in the association.


Sec.  108.11  Relevant considerations.

    (a) In determining whether the petitioner has shown that his or her 
continued service to or participation in the conduct of the affairs of 
the association would not, or is not likely to, pose a threat to the 
interests of the association's depositors or threaten to impair public 
confidence in the association, in order to decide whether the Notice or 
Order should be continued, terminated, or otherwise modified, the OCC 
will consider:
    (1) The nature and extent of the petitioner's participation in the 
affairs of the association;
    (2) The nature of the offense with which the petitioner has been 
charged;
    (3) The extent of the publicity accorded the indictment and trial; 
and
    (4) Such other relevant factors as may be entered on the record.
    (b) When considering a request for the termination or modification 
of a Notice, the OCC will not consider the ultimate guilt or innocence 
of the petitioner with respect to the criminal charge that is 
outstanding.
    (c) When considering a request for the termination or modification 
of an Order which has been issued following a final judgment of 
conviction against a subject individual, the OCC will not collaterally 
review such final judgment of conviction.


Sec.  108.12  Proposed findings and conclusions and recommended 
decision.

    (a) Within 30 days after completion of oral argument or the 
submission of written argument where oral argument has been waived, the 
presiding officer shall file with and certify to the OCC for decision 
the entire record of the hearing, which shall include a recommended 
decision, the Notice or Order, and all other documents filed in 
connection with the hearing.
    (b) The recommended decision shall contain:
    (1) A statement of the issue(s) presented,
    (2) A statement of findings and conclusions, and the reasons or 
basis therefor, on all material issues of fact, law, or discretion 
presented on the record, and
    (3) An appropriate recommendation as to whether the suspension, 
removal, or prohibition should be continued, modified, or terminated.


Sec.  108.13  Decision of the OCC.

    (a) Within 30 days after the recommended decision has been 
certified to the OCC, the OCC shall issue a final decision.
    (b) The OCC's final decision shall contain a statement of the basis 
therefor. The OCC may satisfy this requirement where it adopts the 
recommended decision of the presiding officer upon finding that the 
recommended decision satisfies the requirements of Sec.  109.38 of this 
chapter.
    (c) The OCC shall serve upon the petitioner and the representative 
of the Enforcement Division a copy of the OCC's final decision and the 
related recommended decision.


Sec.  108.14  Miscellaneous.

    The provisions of Sec. Sec.  109.10, 109.11, and 109.12 of this 
chapter shall apply to proceedings under this part.

PART 109--RULES OF PRACTICE AND PROCEDURE IN ADJUDICATORY 
PROCEEDINGS

    Authority:  5 U.S.C. 504, 554-557; 12 U.S.C. 1464, 1467, 1467a, 
1468, 1817, 1818, 1820(k), 1829(e), 1832, 1884, 1972, 3349, 4717, 
5412(b)(2)(B); 15 U.S.C. 78(l), 78o-5, 78u-2, 1639e; 28 U.S.C. 2461 
note; 31 U.S.C. 5321; and 42 U.S.C. 4012a.

Subpart A--Uniform Rules of Practice and Procedure


Sec.  109.1  Scope.

    This subpart prescribes Uniform Rules of practice and procedure 
with regard to Federal savings associations applicable to adjudicatory 
proceedings as to which hearings on the record are provided for by the 
following statutory provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal 
Deposit Insurance Act (FDIA) (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the OCC should issue an 
order to approve or disapprove a person's proposed acquisition of an 
institution;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (Exchange Act) (15 U.S.C. 78o-

[[Page 89894]]

5), to impose sanctions upon any government securities broker or dealer 
or upon any person associated or seeking to become associated with a 
government securities broker or dealer for which the OCC is the 
appropriate agency.
    (e) Assessment of civil money penalties by the OCC against 
institutions, institution-affiliated parties, and certain other persons 
for which it is the appropriate agency for any violation of:
    (1) Section 5 of the Home Owners' Loan Act (HOLA) or any regulation 
or order issued thereunder, pursuant to 12 U.S.C. 1464 (d), (s) and 
(v);
    (2) Section 9 of the HOLA or any regulation or order issued 
thereunder, pursuant to 12 U.S.C. 1467(d);
    (3) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a (i) and 
(r);
    (4) Any provisions of the Change in Bank Control Act, any 
regulation or order issued thereunder or certain unsafe or unsound 
practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 
1817(j)(16);
    (5) Sections 22(h) and 23 of the Federal Reserve Act, or any 
regulation issued thereunder or certain unsafe or unsound practices or 
breaches of fiduciary duty, pursuant to 12 U.S.C. 1468;
    (6) Certain provisions of the Exchange Act, pursuant to section 21B 
of the Exchange Act (15 U.S.C. 78u-2);
    (7) Section 1120 of Financial Institutions Reform, Recovery and 
Enforcement Act of 1989 (12 U.S.C. 3349), or any order or regulation 
issued thereunder;
    (8) The terms of any final or temporary order issued or enforceable 
pursuant to section 8 of the FDIA or of any written agreement executed 
by the OCC, the terms of any conditions imposed in writing by the OCC 
in connection with the grant of an application or request, certain 
unsafe or unsound practices or breaches of fiduciary duty, or any law 
or regulation not otherwise provided herein pursuant to 12 U.S.C. 
1818(i)(2);
    (9) Any provision of law referenced in section 102 of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder; and
    (10) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued thereunder;
    (f) Remedial action under section 102 of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g));
    (g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k)) 
to impose penalties on senior examiners for violation of post-
employment prohibitions; and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules.


Sec.  109.2  Rules of construction.

    For purposes of this subpart:
    (a) Any term in the singular includes the plural, and the plural 
includes the singular, if such use would be appropriate;
    (b) The term counsel includes a non-attorney representative; and
    (c) Unless the context requires otherwise, a party's counsel of 
record, if any, may, on behalf of that party, take any action required 
to be taken by the party.


Sec.  109.3  Definitions.

    For purposes of this subpart, unless explicitly stated to the 
contrary:
    (a) Administrative law judge means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (c) Decisional employee means any member of the OCC's or 
administrative law judge's staff who has not engaged in an 
investigative or prosecutorial role in a proceeding and who may assist 
the OCC or the administrative law judge, respectively, in preparing 
orders, recommended decisions, decisions, and other documents under the 
Uniform Rules.
    (d) Comptroller means the Comptroller of the Currency or his or her 
designee.
    (e) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the OCC in an adjudicatory 
proceeding.
    (f) Final order means an order issued by the OCC with or without 
the consent of the affected institution or the institution-affiliated 
party that has become final, without regard to the pendency of any 
petition for reconsideration or review.
    (g) Institution includes any Federal savings association as that 
term is defined in section 3(b) of the FDIA (12 U.S.C. 1813(b)).
    (h) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 3(u) of the FDIA (12 U.S.C. 
1813(u)).
    (i) Local Rules means those rules found in subpart B of this part.
    (j) OCC means the Office of the Comptroller of the Currency.
    (k) Office of Financial Institution Adjudication (OFIA) means the 
executive body charged with overseeing the administration of 
administrative enforcement proceedings for the OCC, the Board of 
Governors of the Federal Reserve Board, the Federal Deposit Insurance 
Corporation, and the National Credit Union Administration.
    (l) Party means the OCC and any person named as a party in any 
notice.
    (m) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency or other entity or organization, including an 
institution as defined in paragraph (g) of this section.
    (n) Respondent means any party other than the OCC.
    (o) Uniform Rules means those rules in subpart A of this part.
    (p) Violation includes any action (alone or with another or others) 
for or toward causing, bringing about, participating in, counseling, or 
aiding or abetting a violation.


Sec.  109.4  Authority of the Comptroller.

    The Comptroller may, at any time during the pendency of a 
proceeding perform, direct the performance of, or waive performance of, 
any act which could be done or ordered by the administrative law judge.


Sec.  109.5  Authority of the administrative law judge.

    (a) General rule. All proceedings governed by this part shall be 
conducted in accordance with the provisions of chapter 5 of title 5 of 
the United States Code. The administrative law judge shall have all 
powers necessary to conduct a proceeding in a fair and impartial manner 
and to avoid unnecessary delay.
    (b) Powers. The administrative law judge shall have all powers 
necessary to conduct the proceeding in accordance with paragraph (a) of 
this section, including the following powers:
    (1) To administer oaths and affirmations;
    (2) To issue subpoenas, subpoenas duces tecum, and protective 
orders, as authorized by this part, and to quash or modify any such 
subpoenas and orders;
    (3) To receive relevant evidence and to rule upon the admission of 
evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
subpart;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling and/or pre-hearing conferences as set forth 
in Sec.  109.31 of this subpart;

[[Page 89895]]

    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the 
Comptroller shall have the power to grant any motion to dismiss the 
proceeding or to decide any other motion that results in a final 
determination of the merits of the proceeding;
    (8) To prepare and present to the Comptroller a recommended 
decision as provided herein;
    (9) To recuse himself or herself by motion made by a party or on 
his or her own motion;
    (10) To establish time, place and manner limitations on the 
attendance of the public and the media for any public hearing; and
    (11) To do all other things necessary and appropriate to discharge 
the duties of a presiding officer.


Sec.  109.6  Appearance and practice in adjudicatory proceedings.

    (a) Appearance before the OCC or an administrative law judge--(1) 
By attorneys. Any member in good standing of the bar of the highest 
court of any state, commonwealth, possession, territory of the United 
States, or the District of Columbia may represent others before the OCC 
if such attorney is not currently suspended or debarred from practice 
before the OCC.
    (2) By non-attorneys. An individual may appear on his or her own 
behalf; a member of a partnership may represent the partnership; a duly 
authorized officer, director, or employee of any government unit, 
agency, institution, corporation or authority may represent that unit, 
agency, institution, corporation or authority if such officer, 
director, or employee is not currently suspended or debarred from 
practice before the OCC.
    (3) Notice of appearance. Any individual acting as counsel on 
behalf of a party, including the Comptroller, shall file a notice of 
appearance with OFIA at or before the time that individual submits 
papers or otherwise appears on behalf of a party in the adjudicatory 
proceeding. The notice of appearance must include a written declaration 
that the individual is currently qualified as provided in paragraph 
(a)(1) or (a)(2) of this section and is authorized to represent the 
particular party. By filing a notice of appearance on behalf of a party 
in an adjudicatory proceeding, the counsel agrees and represents that 
he or she is authorized to accept service on behalf of the represented 
party and that, in the event of withdrawal from representation, he or 
she will, if required by the administrative law judge, continue to 
accept service until new counsel has filed a notice of appearance or 
until the represented party indicates that he or she will proceed on a 
pro se basis.
    (b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or 
contumacious conduct at any phase of any adjudicatory proceeding may be 
grounds for exclusion or suspension of counsel from the proceeding.


Sec.  109.7  Good faith certification.

    (a) General requirement. Every filing or submission of record 
following the issuance of a notice shall be signed by at least one 
counsel of record in his or her individual name and shall state that 
counsel's address and telephone number. A party who acts as his or her 
own counsel shall sign his or her individual name and state his or her 
address and telephone number on every filing or submission of record.
    (b) Effect of signature. (1) The signature of counsel or a party 
shall constitute a certification that: the counsel or party has read 
the filing or submission of record; to the best of his or her 
knowledge, information, and belief formed after reasonable inquiry, the 
filing or submission of record is well-grounded in fact and is 
warranted by existing law or a good faith argument for the extension, 
modification, or reversal of existing law; and the filing or submission 
of record is not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.
    (2) If a filing or submission of record is not signed, the 
administrative law judge shall strike the filing or submission of 
record, unless it is signed promptly after the omission is called to 
the attention of the pleader or movant.
    (c) Effect of making oral motion or argument. The act of making any 
oral motion or oral argument by any counsel or party constitutes a 
certification that to the best of his or her knowledge, information, 
and belief formed after reasonable inquiry, his or her statements are 
well-grounded in fact and are warranted by existing law or a good faith 
argument for the extension, modification, or reversal of existing law, 
and are not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.


Sec.  109.8  Conflicts of interest.

    (a) Conflict of interest in representation. No person shall appear 
as counsel for another person in an adjudicatory proceeding if it 
reasonably appears that such representation may be materially limited 
by that counsel's responsibilities to a third person or by the 
counsel's own interests. The administrative law judge may take 
corrective measures at any stage of a proceeding to cure a conflict of 
interest in representation, including the issuance of an order limiting 
the scope of representation or disqualifying an individual from 
appearing in a representative capacity for the duration of the 
proceeding.
    (b) Certification and waiver. If any person appearing as counsel 
represents two or more parties to an adjudicatory proceeding or also 
represents a non-party on a matter relevant to an issue in the 
proceeding, counsel must certify in writing at the time of filing the 
notice of appearance required by Sec.  109.6(a):
    (1) That the counsel has personally and fully discussed the 
possibility of conflicts of interest with each such party and non-
party; and
    (2) That each such party and non-party waives any right it might 
otherwise have had to assert any known conflicts of interest or to 
assert any non-material conflicts of interest during the course of the 
proceeding.


Sec.  109.9  Ex parte communications.

    (a) Definition--(1) Ex parte communication means any material oral 
or written communication relevant to the merits of an adjudicatory 
proceeding that was neither on the record nor on reasonable prior 
notice to all parties that takes place between:
    (i) An interested person outside the OCC (including such person's 
counsel); and
    (ii) The administrative law judge handling that proceeding, the 
Comptroller, or a decisional employee.
    (2) Exception. A request for status of the proceeding does not 
constitute an ex parte communication.
    (b) Prohibition of ex parte communications. From the time the 
notice is issued by the Comptroller until the date that the Comptroller 
issues the final decision pursuant to Sec.  109.40(c) of this subpart:
    (1) No interested person outside the OCC shall make or knowingly 
cause to be made an ex parte communication to the Comptroller, the 
administrative law judge, or a decisional employee; and
    (2) The Comptroller, administrative law judge, or decisional 
employee shall not make or knowingly cause to be made to any interested 
person outside the OCC any ex parte communication.
    (c) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the administrative law judge, the 
Comptroller or other person identified

[[Page 89896]]

in paragraph (a) of this section, that person shall cause all such 
written communications (or, if the communication is oral, a memorandum 
stating the substance of the communication) to be placed on the record 
of the proceeding and served on all parties. All other parties to the 
proceeding shall have an opportunity, within ten days of receipt of 
service of the ex parte communication to file responses thereto and to 
recommend any sanctions, in accordance with paragraph (d) of this 
section, that they believe to be appropriate under the circumstances.
    (d) Sanctions. Any party or his or her counsel who makes a 
prohibited ex parte communication, or who encourages or solicits 
another to make any such communication, may be subject to any 
appropriate sanction or sanctions imposed by the Comptroller or the 
administrative law judge including, but not limited to, exclusion from 
the proceedings and an adverse ruling on the issue which is the subject 
of the prohibited communication.
    (e) Separation-of-functions. Except to the extent required for the 
disposition of ex parte matters as authorized by law, the 
administrative law judge may not consult a person or party on any 
matter relevant to the merits of the adjudication, unless on notice and 
opportunity for all parties to participate. An employee or agent 
engaged in the performance of investigative or prosecuting functions 
for the OCC in a case may not, in that or a factually related case, 
participate or advise in the decision, recommended decision, or agency 
review of the recommended decision under Sec.  109.40 of this subpart, 
except as witness or counsel in public proceedings.


Sec.  109.10  Filing of papers.

    (a) Filing. Any papers required to be filed, excluding documents 
produced in response to a discovery request pursuant to Sec. Sec.  
109.25 and 109.26 of this subpart, shall be filed with the OFIA, except 
as otherwise provided.
    (b) Manner of filing. Unless otherwise specified by the Comptroller 
or the administrative law judge, filing may be accomplished by:
    (1) Personal service;
    (2) Delivering the papers to a reliable commercial courier service, 
overnight delivery service, or to the U.S. Post Office for Express Mail 
delivery;
    (3) Mailing the papers by first class, registered, or certified 
mail; or
    (4) Transmission by electronic media, only if expressly authorized, 
and upon any conditions specified, by the Comptroller or the 
administrative law judge. All papers filed by electronic media shall 
also concurrently be filed in accordance with paragraph (c) of this 
section as to form.
    (c) Formal requirements as to papers filed--(1) Form. All papers 
filed must set forth the name, address, and telephone number of the 
counsel or party making the filing and must be accompanied by a 
certification setting forth when and how service has been made on all 
other parties. All papers filed must be double-spaced and printed or 
typewritten on 8 1-2 x 11 inch paper, and must be clear and legible.
    (2) Signature. All papers must be dated and signed as provided in 
Sec.  109.7 of this subpart.
    (3) Caption. All papers filed must include at the head thereof, or 
on a title page, the name of the OCC and of the filing party, the title 
and docket number of the proceeding, and the subject of the particular 
paper.
    (4) Number of copies. Unless otherwise specified by the 
Comptroller, or the administrative law judge, an original and one copy 
of all documents and papers shall be filed, except that only one copy 
of transcripts of testimony and exhibits shall be filed.


Sec.  109.11  Service of papers.

    (a) By the parties. Except as otherwise provided, a party filing 
papers shall serve a copy upon the counsel of record for all other 
parties to the proceeding so represented, and upon any party not so 
represented.
    (b) Method of service. Except as provided in paragraphs (c)(2) and 
(d) of this section, a serving party shall use one or more of the 
following methods of service:
    (1) Personal service;
    (2) Delivering the papers to a reliable commercial courier service, 
overnight delivery service, or to the U.S. Post Office for Express Mail 
delivery;
    (3) Mailing the papers by first class, registered, or certified 
mail; or
    (4) Transmission by electronic media, only if the parties mutually 
agree. Any papers served by electronic media shall also concurrently be 
served in accordance with the requirements of Sec.  109.10(c) of this 
subpart as to form.
    (c) By the Comptroller or the administrative law judge. (1) All 
papers required to be served by the Comptroller or the administrative 
law judge upon a party who has appeared in the proceeding through a 
counsel of record, shall be served by any means specified in paragraph 
(b) of this section.
    (2) If a party has not appeared in the proceeding in accordance 
with Sec.  109.6 of this subpart, the Comptroller or the administrative 
law judge shall make service by any of the following methods:
    (i) By personal service;
    (ii) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (iii) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
party;
    (iv) By registered or certified mail addressed to the person's last 
known address; or
    (v) By any other method reasonably calculated to give actual 
notice.
    (d) Subpoenas. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (3) By delivery to an agent, which in the case of a corporation or 
other association, is delivery to an officer, managing or general 
agent, or to any other agent authorized by appointment or by law to 
receive service and, if the agent is one authorized by statute to 
receive service and the statute so requires, by also mailing a copy to 
the party;
    (4) By registered or certified mail addressed to the person's last 
known address; or
    (5) By any other method reasonably calculated to give actual 
notice.
    (e) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing is held, provided that if service is made on a 
foreign bank in connection with an action or proceeding involving one 
or more of its branches or agencies located in any state, territory, 
possession of the United States, or the District of Columbia, service 
shall be made on at least one branch or agency so involved.


Sec.  109.12  Construction of time limits.

    (a) General rule. In computing any period of time prescribed by 
this subpart, the date of the act or event that commences the 
designated period of

[[Page 89897]]

time is not included. The last day so computed is included unless it is 
a Saturday, Sunday, or Federal holiday. When the last day is a 
Saturday, Sunday, or Federal holiday, the period runs until the end of 
the next day that is not a Saturday, Sunday, or Federal holiday. 
Intermediate Saturdays, Sundays, and Federal holidays are included in 
the computation of time. However, when the time period within which an 
act is to be performed is ten days or less, not including any 
additional time allowed for in paragraph (c) of this section, 
intermediate Saturdays, Sundays, and Federal holidays are not included.
    (b) When papers are deemed to be filed or served. (1) Filing and 
service are deemed to be effective:
    (i) In the case of personal service or same day commercial courier 
delivery, upon actual service;
    (ii) In the case of overnight commercial delivery service, U.S. 
Express mail delivery, or first class, registered, or certified mail, 
upon deposit in or delivery to an appropriate point of collection; or
    (iii) In the case of transmission by electronic media, as specified 
by the authority receiving the filing, in the case of filing, and as 
agreed among the parties, in the case of service.
    (2) The effective filing and service dates specified in paragraph 
(b)(1) of this section may be modified by the Comptroller or 
administrative law judge in the case of filing or by agreement of the 
parties in the case of service.
    (c) Calculation of time for service and filing of responsive 
papers. Whenever a time limit is measured by a prescribed period from 
the service of any notice or paper, the applicable time limits are 
calculated as follows:
    (1) If service is made by first class, registered, or certified 
mail, add three calendar days to the prescribed period;
    (2) If service is made by express mail or overnight delivery 
service, add one calendar day to the prescribed period; or
    (3) If service is made by electronic media transmission, add one 
calendar day to the prescribed period, unless otherwise determined by 
the Comptroller or the administrative law judge in the case of filing, 
or by agreement among the parties in the case of service.


Sec.  109.13  Change of time limits.

    Except as otherwise provided by law, the administrative law judge 
may, for good cause shown, extend the time limits prescribed by the 
Uniform Rules or any notice or order issued in the proceedings. After 
the referral of the case to the Comptroller pursuant to Sec.  109.38 of 
this subpart, the Comptroller may grant extensions of the time limits 
for good cause shown. Extensions may be granted at the motion of a 
party or on the Comptroller's or the administrative law judge's own 
motion after notice and opportunity to respond is afforded all non-
moving parties.


Sec.  109.14  Witness fees and expenses.

    Witnesses subpoenaed for testimony or deposition shall be paid the 
same fees for attendance and mileage as are paid in the United States 
district courts in proceedings in which the United States is a party, 
provided that, in the case of a discovery subpoena addressed to a 
party, no witness fees or mileage need be paid. Fees for witnesses 
shall be tendered in advance by the party requesting the subpoena, 
except that fees and mileage need not be tendered in advance where the 
OCC is the party requesting the subpoena. The OCC shall not be required 
to pay any fees to, or expenses of, any witness not subpoenaed by the 
OCC.


Sec.  109.15  Opportunity for informal settlement.

    Any respondent may, at any time in the proceeding, unilaterally 
submit to Enforcement Counsel written offers or proposals for 
settlement of a proceeding, without prejudice to the rights of any of 
the parties. No such offer or proposal shall be made to any OCC 
representative other than Enforcement Counsel. Submission of a written 
settlement offer does not provide a basis for adjourning or otherwise 
delaying all or any portion of a proceeding under this part. No 
settlement offer or proposal, or any subsequent negotiation or 
resolution, is admissible as evidence in any proceeding.


Sec.  109.16  OCC's right to conduct examination.

    Nothing contained in this subpart limits in any manner the right of 
the OCC to conduct any examination, inspection, or visitation of any 
institution or institution-affiliated party, or the right of the OCC to 
conduct or continue any form of investigation authorized by law.


Sec.  109.17  Collateral attacks on adjudicatory proceeding.

    If an interlocutory appeal or collateral attack is brought in any 
court concerning all or any part of an adjudicatory proceeding, the 
challenged adjudicatory proceeding shall continue without regard to the 
pendency of that court proceeding. No default or other failure to act 
as directed in the adjudicatory proceeding within the times prescribed 
in this subpart shall be excused based on the pendency before any court 
of any interlocutory appeal or collateral attack.


Sec.  109.18  Commencement of proceeding and contents of notice.

    (a) Commencement of proceeding. (1)(i) Except for change-in-control 
proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), a 
proceeding governed by this subpart is commenced by issuance of a 
notice by the Comptroller.
    (ii) The notice must be served by the Comptroller upon the 
respondent and given to any other appropriate financial institution 
supervisory authority where required by law.
    (iii) The notice must be filed with the OFIA.
    (2) Change-in control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the 
Comptroller.
    (b) Contents of notice. The notice must set forth:
    (1) The legal authority for the proceeding and for the OCC's 
jurisdiction over the proceeding;
    (2) A statement of the matters of fact or law showing that the OCC 
is entitled to relief;
    (3) A proposed order or prayer for an order granting the requested 
relief;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as required by law or 
regulation;
    (6) The time within which to request a hearing as required by law 
or regulation; and
    (7) The answer and/or request for a hearing shall be filed with 
OFIA.


Sec.  109.19  Answer.

    (a) When. Within 20 days of service of the notice, respondent shall 
file an answer as designated in the notice. In a civil money penalty 
proceeding, respondent shall also file a request for a hearing within 
20 days of service of the notice.
    (b) Content of answer. An answer must specifically respond to each 
paragraph or allegation of fact contained in the notice and must admit, 
deny, or state that the party lacks sufficient information to admit or 
deny each allegation of fact. A statement of lack of information has 
the effect of a denial. Denials must fairly meet the substance of each 
allegation of fact denied; general denials are not permitted. When a 
respondent denies part of an allegation, that part must be denied and 
the remainder specifically admitted. Any allegation of fact in the 
notice which is not denied in the answer must be deemed admitted for 
purposes of the

[[Page 89898]]

proceeding. A respondent is not required to respond to the portion of a 
notice that constitutes the prayer for relief or proposed order. The 
answer must set forth affirmative defenses, if any, asserted by the 
respondent.
    (c) Default--(1) Effect of failure to answer. Failure of a 
respondent to file an answer required by this section within the time 
provided constitutes a waiver of his or her right to appear and contest 
the allegations in the notice. If no timely answer is filed, 
Enforcement Counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the administrative law judge shall file with the 
Comptroller a recommended decision containing the findings and the 
relief sought in the notice. Any final order issued by the Comptroller 
based upon a respondent's failure to answer is deemed to be an order 
issued upon consent.
    (2) Effect of failure to request a hearing in civil money penalty 
proceedings. If respondent fails to request a hearing as required by 
law within the time provided, the notice of assessment constitutes a 
final and unappealable order.


Sec.  109.20  Amended pleadings.

    (a) Amendments. The notice or answer may be amended or supplemented 
at any stage of the proceeding. The respondent must answer an amended 
notice within the time remaining for the respondent's answer to the 
original notice, or within ten days after service of the amended 
notice, whichever period is longer, unless the Comptroller or 
administrative law judge orders otherwise for good cause.
    (b) Amendments to conform to the evidence. When issues not raised 
in the notice or answer are tried at the hearing by express or implied 
consent of the parties, they will be treated in all respects as if they 
had been raised in the notice or answer, and no formal amendments are 
required. If evidence is objected to at the hearing on the ground that 
it is not within the issues raised by the notice or answer, the 
administrative law judge may admit the evidence when admission is 
likely to assist in adjudicating the merits of the action and the 
objecting party fails to satisfy the administrative law judge that the 
admission of such evidence would unfairly prejudice that party's action 
or defense upon the merits. The administrative law judge may grant a 
continuance to enable the objecting party to meet such evidence.


Sec.  109.21  Failure to appear.

    Failure of a respondent to appear in person at the hearing or by a 
duly authorized counsel constitutes a waiver of respondent's right to a 
hearing and is deemed an admission of the facts as alleged and consent 
to the relief sought in the notice. Without further proceedings or 
notice to the respondent, the administrative law judge shall file with 
the Comptroller a recommended decision containing the findings and the 
relief sought in the notice.


Sec.  109.22  Consolidation and severance of actions.

    (a) Consolidation. (1) On the motion of any party, or on the 
administrative law judge's own motion, the administrative law judge may 
consolidate, for some or all purposes, any two or more proceedings, if 
each such proceeding involves or arises out of the same transaction, 
occurrence or series of transactions or occurrences, or involves at 
least one common respondent or a material common question of law or 
fact, unless such consolidation would cause unreasonable delay or 
injustice.
    (2) In the event of consolidation under paragraph (a)(1) of this 
section, appropriate adjustment to the prehearing schedule must be made 
to avoid unnecessary expense, inconvenience, or delay.
    (b) Severance. The administrative law judge may, upon the motion of 
any party, sever the proceeding for separate resolution of the matter 
as to any respondent only if the administrative law judge finds that:
    (1) Undue prejudice or injustice to the moving party would result 
from not severing the proceeding; and
    (2) Such undue prejudice or injustice would outweigh the interests 
of judicial economy and expedition in the complete and final resolution 
of the proceeding.


Sec.  109.23  Motions.

    (a) In writing. (1) Except as otherwise provided herein, an 
application or request for an order or ruling must be made by written 
motion.
    (2) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.
    (3) No oral argument may be held on written motions except as 
otherwise directed by the administrative law judge. Written memoranda, 
briefs, affidavits or other relevant material or documents may be filed 
in support of or in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the administrative law judge directs that such motion be reduced to 
writing.
    (c) Filing of motions. Motions must be filed with the 
administrative law judge, but upon the filing of the recommended 
decision, motions must be filed with the Comptroller.
    (d) Responses. (1) Except as otherwise provided herein, within ten 
days after service of any written motion, or within such other period 
of time as may be established by the administrative law judge or the 
Comptroller, any party may file a written response to a motion. The 
administrative law judge shall not rule on any oral or written motion 
before each party has had an opportunity to file a response.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed a consent by that party to the 
entry of an order substantially in the form of the order accompanying 
the motion.
    (e) Dilatory motions. Frivolous, dilatory or repetitive motions are 
prohibited. The filing of such motions may form the basis for 
sanctions.
    (f) Dispositive motions. Dispositive motions are governed by 
Sec. Sec.  109.29 and 109.30 of this subpart.


Sec.  109.24  Scope of document discovery.

    (a) Limits on discovery. (1) Subject to the limitations set out in 
paragraphs (b), (c), and (d) of this section, a party to a proceeding 
under this subpart may obtain document discovery by serving a written 
request to produce documents. For purposes of a request to produce 
documents, the term ``documents'' may be defined to include drawings, 
graphs, charts, photographs, recordings, data stored in electronic 
form, and other data compilations from which information can be 
obtained, or translated, if necessary, by the parties through detection 
devices into reasonably usable form, as well as written material of all 
kinds.
    (2) Discovery by use of deposition is governed by Sec.  109.102 of 
this part.
    (3) Discovery by use of interrogatories is not permitted.
    (b) Relevance. A party may obtain document discovery regarding any 
matter, not privileged, that has material relevance to the merits of 
the pending action. Any request to produce documents that calls for 
irrelevant material, that is unreasonable, oppressive, excessive in 
scope, unduly burdensome, or repetitive of previous requests, or that 
seeks to obtain privileged documents will be denied or modified. A 
request is unreasonable, oppressive, excessive in scope or unduly 
burdensome if, among other things, it fails to include justifiable

[[Page 89899]]

limitations on the time period covered and the geographic locations to 
be searched, the time provided to respond in the request is inadequate, 
or the request calls for copies of documents to be delivered to the 
requesting party and fails to include the requestor's written agreement 
to pay in advance for the copying, in accordance with Sec.  109.25 of 
this subpart.
    (c) Privileged matter. Privileged documents are not discoverable. 
Privileges include the attorney-client privilege, work-product 
privilege, any government's or government agency's deliberative-process 
privilege, and any other privileges the Constitution, any applicable 
act of Congress, or the principles of common law provide.
    (d) Time limits. All discovery, including all responses to 
discovery requests, shall be completed at least 20 days prior to the 
date scheduled for the commencement of the hearing, except as provided 
in the Local Rules. No exceptions to this time limit shall be 
permitted, unless the administrative law judge finds on the record that 
good cause exists for waiving the requirements of this paragraph.


Sec.  109.25  Request for document discovery from parties.

    (a) General rule. Any party may serve on any other party a request 
to produce for inspection any discoverable documents that are in the 
possession, custody, or control of the party upon whom the request is 
served. The request must identify the documents to be produced either 
by individual item or by category, and must describe each item and 
category with reasonable particularity. Documents must be produced as 
they are kept in the usual course of business or must be organized to 
correspond with the categories in the request.
    (b) Production or copying. The request must specify a reasonable 
time, place, and manner for production and performing any related acts. 
In lieu of inspecting the documents, the requesting party may specify 
that all or some of the responsive documents be copied and the copies 
delivered to the requesting party. If copying of fewer than 250 pages 
is requested, the party to whom the request is addressed shall bear the 
cost of copying and shipping charges. If a party requests 250 pages or 
more of copying, the requesting party shall pay for the copying and 
shipping charges. Copying charges are the current per-page copying rate 
imposed under 12 CFR 4.17 for requests under the Freedom of Information 
Act (5 U.S.C. 552). The party to whom the request is addressed may 
require payment in advance before producing the documents.
    (c) Obligation to update responses. A party who has responded to a 
discovery request with a response that was complete when made is not 
required to supplement the response to include documents thereafter 
acquired, unless the responding party learns that:
    (1) The response was materially incorrect when made; or
    (2) The response, though correct when made, is no longer true and a 
failure to amend the response is, in substance, a knowing concealment.
    (d) Motions to limit discovery. (1) Any party that objects to a 
discovery request may, within ten days of being served with such 
request, file a motion in accordance with the provisions of Sec.  
109.23 of this subpart to revoke or otherwise limit the request. If an 
objection is made to only a portion of an item or category in a 
request, the portion objected to shall be specified. Any objections not 
made in accordance with this paragraph and Sec.  109.23 of this subpart 
are waived.
    (2) The party who served the request that is the subject of a 
motion to revoke or limit may file a written response within five days 
of service of the motion. No other party may file a response.
    (e) Privilege. At the time other documents are produced, the 
producing party must reasonably identify all documents withheld on the 
grounds of privilege and must produce a statement of the basis for the 
assertion of privilege. When similar documents that are protected by 
deliberative process, attorney-work-product, or attorney-client 
privilege are voluminous, these documents may be identified by category 
instead of by individual document. The administrative law judge retains 
discretion to determine when the identification by category is 
insufficient.
    (f) Motions to compel production. (1) If a party withholds any 
documents as privileged or fails to comply fully with a discovery 
request, the requesting party may, within ten days of the assertion of 
privilege or of the time the failure to comply becomes known to the 
requesting party, file a motion in accordance with the provisions of 
Sec.  109.23 of this subpart for the issuance of a subpoena compelling 
production.
    (2) The party who asserted the privilege or failed to comply with 
the request may file a written response to a motion to compel within 
five days of service of the motion. No other party may file a response.
    (g) Ruling on motions. After the time for filing responses pursuant 
to this section has expired, the administrative law judge shall rule 
promptly on all motions filed pursuant to this section. If the 
administrative law judge determines that a discovery request, or any of 
its terms, calls for irrelevant material, is unreasonable, oppressive, 
excessive in scope, unduly burdensome, or repetitive of previous 
requests, or seeks to obtain privileged documents, he or she may deny 
or modify the request, and may issue appropriate protective orders, 
upon such conditions as justice may require. The pendency of a motion 
to strike or limit discovery or to compel production is not a basis for 
staying or continuing the proceeding, unless otherwise ordered by the 
administrative law judge. Notwithstanding any other provision in this 
part, the administrative law judge may not release, or order a party to 
produce, documents withheld on grounds of privilege if the party has 
stated to the administrative law judge its intention to file a timely 
motion for interlocutory review of the administrative law judge's order 
to produce the documents, and until the motion for interlocutory review 
has been decided.
    (h) Enforcing discovery subpoenas. If the administrative law judge 
issues a subpoena compelling production of documents by a party, the 
subpoenaing party may, in the event of noncompliance and to the extent 
authorized by applicable law, apply to any appropriate United States 
district court for an order requiring compliance with the subpoena. A 
party's right to seek court enforcement of a subpoena shall not in any 
manner limit the sanctions that may be imposed by the administrative 
law judge against a party who fails to produce subpoenaed documents.


Sec.  109.26  Document subpoenas to nonparties.

    (a) General rules. (1) Any party may apply to the administrative 
law judge for the issuance of a document discovery subpoena addressed 
to any person who is not a party to the proceeding. The application 
must contain a proposed document subpoena and a brief statement showing 
the general relevance and reasonableness of the scope of documents 
sought. The subpoenaing party shall specify a reasonable time, place, 
and manner for making production in response to the document subpoena.
    (2) A party shall only apply for a document subpoena under this 
section within the time period during which such party could serve a 
discovery request under Sec.  109.24(d) of this subpart. The party 
obtaining the document subpoena is responsible for

[[Page 89900]]

serving it on the subpoenaed person and for serving copies on all 
parties. Document subpoenas may be served in any state, territory, or 
possession of the United States, the District of Columbia, or as 
otherwise provided by law.
    (3) The administrative law judge shall promptly issue any document 
subpoena requested pursuant to this section. If the administrative law 
judge determines that the application does not set forth a valid basis 
for the issuance of the subpoena, or that any of its terms are 
unreasonable, oppressive, excessive in scope, or unduly burdensome, he 
or she may refuse to issue the subpoena or may issue it in a modified 
form upon such conditions as may be consistent with the Uniform Rules.
    (b) Motion to quash or modify. (1) Any person to whom a document 
subpoena is directed may file a motion to quash or modify such 
subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant shall serve the motion on all 
parties, and any party may respond to such motion within ten days of 
service of the motion.
    (2) Any motion to quash or modify a document subpoena must be filed 
on the same basis, including the assertion of privilege, upon which a 
party could object to a discovery request under Sec.  109.25(d) of this 
subpart, and during the same time limits during which such an objection 
could be filed.
    (c) Enforcing document subpoenas. If a subpoenaed person fails to 
comply with any subpoena issued pursuant to this section or any order 
of the administrative law judge which directs compliance with all or 
any portion of a document subpoena, the subpoenaing party or any other 
aggrieved party may, to the extent authorized by applicable law, apply 
to an appropriate United States district court for an order requiring 
compliance with so much of the document subpoena as the administrative 
law judge has not quashed or modified. A party's right to seek court 
enforcement of a document subpoena shall in no way limit the sanctions 
that may be imposed by the administrative law judge on a party who 
induces a failure to comply with subpoenas issued under this section.


Sec.  109.27  Deposition of witness unavailable for hearing.

    (a) General rules. (1) If a witness will not be available for the 
hearing, a party may apply in accordance with the procedures set forth 
in paragraph (a)(2) of this section, to the administrative law judge 
for the issuance of a subpoena, including a subpoena duces tecum, 
requiring the attendance of the witness at a deposition. The 
administrative law judge may issue a deposition subpoena under this 
section upon showing that:
    (i) The witness will be unable to attend or may be prevented from 
attending the hearing because of age, sickness or infirmity, or will 
otherwise be unavailable;
    (ii) The witness' unavailability was not procured or caused by the 
subpoenaing party;
    (iii) The testimony is reasonably expected to be material; and
    (iv) Taking the deposition will not result in any undue burden to 
any other party and will not cause undue delay of the proceeding.
    (2) The application must contain a proposed deposition subpoena and 
a brief statement of the reasons for the issuance of the subpoena. The 
subpoena must name the witness whose deposition is to be taken and 
specify the time and place for taking the deposition. A deposition 
subpoena may require the witness to be deposed at any place within the 
country in which that witness resides or has a regular place of 
employment or such other convenient place as the administrative law 
judge shall fix.
    (3) Any requested subpoena that sets forth a valid basis for its 
issuance must be promptly issued, unless the administrative law judge 
on his or her own motion, requires a written response or requires 
attendance at a conference concerning whether the requested subpoena 
should be issued.
    (4) The party obtaining a deposition subpoena is responsible for 
serving it on the witness and for serving copies on all parties. Unless 
the administrative law judge orders otherwise, no deposition under this 
section shall be taken on fewer than ten days' notice to the witness 
and all parties. Deposition subpoenas may be served in any state, 
territory, possession of the United States, or the District of 
Columbia, on any person or company doing business in any state, 
territory, possession of the United States, or the District of 
Columbia, or as otherwise permitted by law.
    (b) Objections to deposition subpoenas. (1) The witness and any 
party who has not had an opportunity to oppose a deposition subpoena 
issued under this section may file a motion with the administrative law 
judge to quash or modify the subpoena prior to the time for compliance 
specified in the subpoena, but not more than ten days after service of 
the subpoena.
    (2) A statement of the basis for the motion to quash or modify a 
subpoena issued under this section must accompany the motion. The 
motion must be served on all parties.
    (c) Procedure upon deposition. (1) Each witness testifying pursuant 
to a deposition subpoena must be duly sworn, and each party shall have 
the right to examine the witness. Objections to questions or documents 
must be in short form, stating the grounds for the objection. Failure 
to object to questions or documents is not deemed a waiver except where 
the ground for the objection might have been avoided if the objection 
had been timely presented. All questions, answers, and objections must 
be recorded.
    (2) Any party may move before the administrative law judge for an 
order compelling the witness to answer any questions the witness has 
refused to answer or submit any evidence the witness has refused to 
submit during the deposition.
    (3) The deposition must be subscribed by the witness, unless the 
parties and the witness, by stipulation, have waived the signing, or 
the witness is ill, cannot be found, or has refused to sign. If the 
deposition is not subscribed by the witness, the court reporter taking 
the deposition shall certify that the transcript is a true and complete 
transcript of the deposition.
    (d) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any order of the administrative law judge which directs compliance 
with all or any portion of a deposition subpoena under paragraph (b) or 
(c)(2) of this section, the subpoenaing party or other aggrieved party 
may, to the extent authorized by applicable law, apply to an 
appropriate United States district court for an order requiring 
compliance with the portions of the subpoena that the administrative 
law judge has ordered enforced. A party's right to seek court 
enforcement of a deposition subpoena in no way limits the sanctions 
that may be imposed by the administrative law judge on a party who 
fails to comply with or procures a failure to comply with, a subpoena 
issued under this section.


Sec.  109.28  Interlocutory review.

    (a) General rule. The Comptroller may review a ruling of the 
administrative law judge prior to the certification of the record to 
the Comptroller only in accordance with the procedures set forth in 
this section and Sec.  109.23 of this subpart.
    (b) Scope of review. The Comptroller may exercise interlocutory 
review of a ruling of the administrative law judge if the Comptroller 
finds that:
    (1) The ruling involves a controlling question of law or policy as 
to which

[[Page 89901]]

substantial grounds exist for a difference of opinion;
    (2) Immediate review of the ruling may materially advance the 
ultimate termination of the proceeding;
    (3) Subsequent modification of the ruling at the conclusion of the 
proceeding would be an inadequate remedy; or
    (4) Subsequent modification of the ruling would cause unusual delay 
or expense.
    (c) Procedure. Any request for interlocutory review shall be filed 
by a party with the administrative law judge within ten days of his or 
her ruling and shall otherwise comply with Sec.  109.23 of this 
subpart. Any party may file a response to a request for interlocutory 
review in accordance with Sec.  109.23(d) of this subpart. Upon the 
expiration of the time for filing all responses, the administrative law 
judge shall refer the matter to the Comptroller for final disposition.
    (d) Suspension of proceeding. Neither a request for interlocutory 
review nor any disposition of such a request by the Comptroller under 
this section suspends or stays the proceeding unless otherwise ordered 
by the administrative law judge or the Comptroller.


Sec.  109.29  Summary disposition.

    (a) In general. The administrative law judge shall recommend that 
the Comptroller issue a final order granting a motion for summary 
disposition if the undisputed pleaded facts, admissions, affidavits, 
stipulations, documentary evidence, matters as to which official notice 
may be taken, and any other evidentiary materials properly submitted in 
connection with a motion for summary disposition show that:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.
    (b) Filing of motions and responses. (1) Any party who believes 
that there is no genuine issue of material fact to be determined and 
that he or she is entitled to a decision as a matter of law may move at 
any time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 days after service of such a motion, 
or within such time period as allowed by the administrative law judge, 
may file a response to such motion.
    (2) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, investigatory depositions, transcripts, 
affidavits and any other evidentiary materials that the moving party 
contends support his or her position. The motion must also be 
accompanied by a brief containing the points and authorities in support 
of the contention of the moving party. Any party opposing a motion for 
summary disposition must file a statement setting forth those material 
facts as to which he or she contends a genuine dispute exists. Such 
opposition must be supported by evidence of the same type as that 
submitted with the motion for summary disposition and a brief 
containing the points and authorities in support of the contention that 
summary disposition would be inappropriate.
    (c) Hearing on motion. At the request of any party or on his or her 
own motion, the administrative law judge may hear oral argument on the 
motion for summary disposition.
    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the administrative law judge 
shall determine whether the moving party is entitled to summary 
disposition. If the administrative law judge determines that summary 
disposition is warranted, the administrative law judge shall submit a 
recommended decision to that effect to the Comptroller. If the 
administrative law judge finds that no party is entitled to summary 
disposition, he or she shall make a ruling denying the motion.


Sec.  109.30  Partial summary disposition.

    If the administrative law judge determines that a party is entitled 
to summary disposition as to certain claims only, he or she shall defer 
submitting a recommended decision as to those claims. A hearing on the 
remaining issues must be ordered. Those claims for which the 
administrative law judge has determined that summary disposition is 
warranted will be addressed in the recommended decision filed at the 
conclusion of the hearing.


Sec.  109.31  Scheduling and prehearing conferences.

    (a) Scheduling conference. Within 30 days of service of the notice 
or order commencing a proceeding or such other time as parties may 
agree, the administrative law judge shall direct counsel for all 
parties to meet with him or her in person at a specified time and place 
prior to the hearing or to confer by telephone for the purpose of 
scheduling the course and conduct of the proceeding. This meeting or 
telephone conference is called a ``scheduling conference.'' The 
identification of potential witnesses, the time for and manner of 
discovery, and the exchange of any prehearing materials including 
witness lists, statements of issues, stipulations, exhibits and any 
other materials may also be determined at the scheduling conference.
    (b) Prehearing conferences. The administrative law judge may, in 
addition to the scheduling conference, on his or her own motion or at 
the request of any party, direct counsel for the parties to meet with 
him or her (in person or by telephone) at a prehearing conference to 
address any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, 
authenticity and admissibility into evidence of documents;
    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes;
    (7) Amendments to pleadings; and
    (8) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (c) Transcript. The administrative law judge, in his or her 
discretion, may require that a scheduling or prehearing conference be 
recorded by a court reporter. A transcript of the conference and any 
materials filed, including orders, becomes part of the record of the 
proceeding. A party may obtain a copy of the transcript at its expense.
    (d) Scheduling or prehearing orders. At or within a reasonable time 
following the conclusion of the scheduling conference or any prehearing 
conference, the administrative law judge shall serve on each party an 
order setting forth any agreements reached and any procedural 
determinations made.


Sec.  109.32  Prehearing submissions.

    (a) Within the time set by the administrative law judge, but in no 
case later than 14 days before the start of the hearing, each party 
shall serve on every other party, his or her:
    (1) Prehearing statement;
    (2) Final list of witnesses to be called to testify at the hearing, 
including name and address of each witness and a short summary of the 
expected testimony of each witness;
    (3) List of the exhibits to be introduced at the hearing along with 
a copy of each exhibit; and

[[Page 89902]]

    (4) Stipulations of fact, if any.
    (b) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraph (a) of 
this section, except for good cause shown.


Sec.  109.33  Public hearings.

    (a) General rule. All hearings shall be open to the public, unless 
the Comptroller, in the Comptroller's discretion, determines that 
holding an open hearing would be contrary to the public interest. 
Within 20 days of service of the notice or, in the case of change-in-
control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 
1817(j)(4)), within 20 days from service of the hearing order, any 
respondent may file with the Comptroller a request for a private 
hearing, and any party may file a reply to such a request. A party must 
serve on the administrative law judge a copy of any request or reply 
the party files with the Comptroller. The form of, and procedure for, 
these requests and replies are governed by Sec.  109.23 of this 
subpart. A party's failure to file a request or a reply constitutes a 
waiver of any objections regarding whether the hearing will be public 
or private.
    (b) Filing document under seal. Enforcement Counsel, in his or her 
discretion, may file any document or part of a document under seal if 
disclosure of the document would be contrary to the public interest. 
The administrative law judge shall take all appropriate steps to 
preserve the confidentiality of such documents or parts thereof, 
including closing portions of the hearing to the public.


Sec.  109.34  Hearing subpoenas.

    (a) Issuance. (1) Upon application of a party showing general 
relevance and reasonableness of scope of the testimony or other 
evidence sought, the administrative law judge may issue a subpoena or a 
subpoena duces tecum requiring the attendance of a witness at the 
hearing or the production of documentary or physical evidence at the 
hearing. The application for a hearing subpoena must also contain a 
proposed subpoena specifying the attendance of a witness or the 
production of evidence from any state, territory, or possession of the 
United States, the District of Columbia, or as otherwise provided by 
law at any designated place where the hearing is being conducted. The 
party making the application shall serve a copy of the application and 
the proposed subpoena on every other party.
    (2) A party may apply for a hearing subpoena at any time before the 
commencement of a hearing. During a hearing, a party may make an 
application for a subpoena orally on the record before the 
administrative law judge.
    (3) The administrative law judge shall promptly issue any hearing 
subpoena requested pursuant to this section. If the administrative law 
judge determines that the application does not set forth a valid basis 
for the issuance of the subpoena, or that any of its terms are 
unreasonable, oppressive, excessive in scope, or unduly burdensome, he 
or she may refuse to issue the subpoena or may issue it in a modified 
form upon any conditions consistent with this subpart. Upon issuance by 
the administrative law judge, the party making the application shall 
serve the subpoena on the person named in the subpoena and on each 
party.
    (b) Motion to quash or modify. (1) Any person to whom a hearing 
subpoena is directed or any party may file a motion to quash or modify 
the subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant must serve the motion on each party 
and on the person named in the subpoena. Any party may respond to the 
motion within ten days of service of the motion.
    (2) Any motion to quash or modify a hearing subpoena must be filed 
prior to the time specified in the subpoena for compliance, but not 
more than ten days after the date of service of the subpoena upon the 
movant.
    (c) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section or any order of the 
administrative law judge which directs compliance with all or any 
portion of a document subpoena, the subpoenaing party or any other 
aggrieved party may seek enforcement of the subpoena pursuant to Sec.  
109.26(c) of this subpart.


Sec.  109.35  Conduct of hearings.

    (a) General rules. (1) Hearings shall be conducted so as to provide 
a fair and expeditious presentation of the relevant disputed issues. 
Each party has the right to present its case or defense by oral and 
documentary evidence and to conduct such cross examination as may be 
required for full disclosure of the facts.
    (2) Order of hearing. Enforcement Counsel shall present its case-
in-chief first, unless otherwise ordered by the administrative law 
judge, or unless otherwise expressly specified by law or regulation. 
Enforcement Counsel shall be the first party to present an opening 
statement and a closing statement, and may make a rebuttal statement 
after the respondent's closing statement. If there are multiple 
respondents, respondents may agree among themselves as to their order 
of presentation of their cases, but if they do not agree the 
administrative law judge shall fix the order.
    (3) Examination of witnesses. Only one counsel for each party may 
conduct an examination of a witness, except that in the case of 
extensive direct examination, the administrative law judge may permit 
more than one counsel for the party presenting the witness to conduct 
the examination. A party may have one counsel conduct the direct 
examination and another counsel conduct re-direct examination of a 
witness, or may have one counsel conduct the cross examination of a 
witness and another counsel conduct the re-cross examination of a 
witness.
    (4) Stipulations. Unless the administrative law judge directs 
otherwise, all stipulations of fact and law previously agreed upon by 
the parties, and all documents, the admissibility of which have been 
previously stipulated, will be admitted into evidence upon commencement 
of the hearing.
    (b) Transcript. The hearing must be recorded and transcribed. The 
reporter will make the transcript available to any party upon payment 
by that party to the reporter of the cost of the transcript. The 
administrative law judge may order the record corrected, either upon 
motion to correct, upon stipulation of the parties, or following notice 
to the parties upon the administrative law judge's own motion.


Sec.  109.36  Evidence.

    (a) Admissibility. (1) Except as is otherwise set forth in this 
section, relevant, material, and reliable evidence that is not unduly 
repetitive is admissible to the fullest extent authorized by the APA 
and other applicable law.
    (2) Evidence that would be admissible under the Federal Rules of 
Evidence is admissible in a proceeding conducted pursuant to this 
subpart.
    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence may not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant, 
material, reliable and not unduly repetitive.
    (b) Official notice. (1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court and any material information in the official public 
records of any Federal or state government agency.

[[Page 89903]]

    (2) All matters officially noticed by the administrative law judge 
or Comptroller shall appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, shall be afforded an opportunity to 
object.
    (c) Documents. (1) A duplicate copy of a document is admissible to 
the same extent as the original, unless a genuine issue is raised as to 
whether the copy is in some material respect not a true and legible 
copy of the original.
    (2) Subject to the requirements of paragraph (a) of this section, 
any document, including a report of examination, supervisory activity, 
inspection or visitation, prepared by the appropriate Federal banking 
agency, as defined in section 3(q) of the FDIA (12 U.S.C. 1813(q)), or 
state regulatory agency, is admissible either with or without a 
sponsoring witness.
    (3) Witnesses may use existing or newly created charts, exhibits, 
calendars, calculations, outlines or other graphic material to 
summarize, illustrate, or simplify the presentation of testimony. Such 
materials may, subject to the administrative law judge's discretion, be 
used with or without being admitted into evidence.
    (d) Objections. (1) Objections to the admissibility of evidence 
must be timely made and rulings on all objections must appear on the 
record.
    (2) When an objection to a question or line of questioning 
propounded to a witness is sustained, the examining counsel may make a 
specific proffer on the record of what he or she expected to prove by 
the expected testimony of the witness, either by representation of 
counsel or by direct interrogation of the witness.
    (3) The administrative law judge shall retain rejected exhibits, 
adequately marked for identification, for the record, and transmit such 
exhibits to the Comptroller.
    (4) Failure to object to admission of evidence or to any ruling 
constitutes a waiver of the objection.
    (e) Stipulations. The parties may stipulate as to any relevant 
matters of fact or the authentication of any relevant documents. Such 
stipulations must be received in evidence at a hearing, and are binding 
on the parties with respect to the matters therein stipulated.
    (f) Depositions of unavailable witnesses. (1) If a witness is 
unavailable to testify at a hearing, and that witness has testified in 
a deposition to which all parties in a proceeding had notice and an 
opportunity to participate, a party may offer as evidence all or any 
part of the transcript of the deposition, including deposition 
exhibits, if any.
    (2) Such deposition transcript is admissible to the same extent 
that testimony would have been admissible had that person testified at 
the hearing, provided that if a witness refused to answer proper 
questions during the depositions, the administrative law judge may, on 
that basis, limit the admissibility of the deposition in any manner 
that justice requires.
    (3) Only those portions of a deposition received in evidence at the 
hearing constitute a part of the record.


Sec.  109.37  Post-hearing filings.

    (a) Proposed findings and conclusions and supporting briefs. (1) 
Using the same method of service for each party, the administrative law 
judge shall serve notice upon each party, that the certified 
transcript, together with all hearing exhibits and exhibits introduced 
but not admitted into evidence at the hearing, has been filed. Any 
party may file with the administrative law judge proposed findings of 
fact, proposed conclusions of law, and a proposed order within 30 days 
following service of this notice by the administrative law judge or 
within such longer period as may be ordered by the administrative law 
judge.
    (2) Proposed findings and conclusions must be supported by citation 
to any relevant authorities and by page references to any relevant 
portions of the record. A post-hearing brief may be filed in support of 
proposed findings and conclusions, either as part of the same document 
or in a separate document. Any party who fails to file timely with the 
administrative law judge any proposed finding or conclusion is deemed 
to have waived the right to raise in any subsequent filing or 
submission any issue not addressed in such party's proposed finding or 
conclusion.
    (b) Reply briefs. Reply briefs may be filed within 15 days after 
the date on which the parties' proposed findings, conclusions, and 
order are due. Reply briefs must be strictly limited to responding to 
new matters, issues, or arguments raised in another party's papers. A 
party who has not filed proposed findings of fact and conclusions of 
law or a post-hearing brief may not file a reply brief.
    (c) Simultaneous filing required. The administrative law judge 
shall not order the filing by any party of any brief or reply brief in 
advance of the other party's filing of its brief.


Sec.  109.38  Recommended decision and filing of record.

    (a) Filing of recommended decision and record. Within 45 days after 
expiration of the time allowed for filing reply briefs under Sec.  
109.37(b) of this subpart, the administrative law judge shall file with 
and certify to the Comptroller, for decision, the record of the 
proceeding. The record must include the administrative law judge's 
recommended decision, recommended findings of fact, recommended 
conclusions of law, and proposed order; all prehearing and hearing 
transcripts, exhibits, and rulings; and the motions, briefs, memoranda, 
and other supporting papers filed in connection with the hearing. The 
administrative law judge shall serve upon each party the recommended 
decision, findings, conclusions, and proposed order.
    (b) Filing of index. At the same time the administrative law judge 
files with and certifies to the Comptroller for final determination the 
record of the proceeding, the administrative law judge shall furnish to 
the Comptroller a certified index of the entire record of the 
proceeding. The certified index shall include, at a minimum, an entry 
for each paper, document or motion filed with the administrative law 
judge in the proceeding, the date of the filing, and the identity of 
the filer. The certified index shall also include an exhibit index 
containing, at a minimum, an entry consisting of exhibit number and 
title or description for: Each exhibit introduced and admitted into 
evidence at the hearing; each exhibit introduced but not admitted into 
evidence at the hearing; each exhibit introduced and admitted into 
evidence after the completion of the hearing; and each exhibit 
introduced but not admitted into evidence after the completion of the 
hearing.


Sec.  109.39  Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  109.38 of this subpart, a party may file with the Comptroller 
written exceptions to the administrative law judge's recommended 
decision, findings, conclusions or proposed order, to the admission or 
exclusion of evidence, or to the failure of the administrative law 
judge to make a ruling proposed by a party. A supporting brief may be 
filed at the time the exceptions are filed, either as part of the same 
document or in a separate document.
    (b) Effect of failure to file or raise exceptions. (1) Failure of a 
party to file exceptions to those matters specified in paragraph (a) of 
this section within the time prescribed is deemed a waiver of objection 
thereto.

[[Page 89904]]

    (2) No exception need be considered by the Comptroller if the party 
taking exception had an opportunity to raise the same objection, issue, 
or argument before the administrative law judge and failed to do so.
    (c) Contents. (1) All exceptions and briefs in support of such 
exceptions must be confined to the particular matters in, or omissions 
from, the administrative law judge's recommendations to which that 
party takes exception.
    (2) All exceptions and briefs in support of exceptions must set 
forth page or paragraph references to the specific parts of the 
administrative law judge's recommendations to which exception is taken, 
the page or paragraph references to those portions of the record relied 
upon to support each exception, and the legal authority relied upon to 
support each exception.


Sec.  109.40  Review by the Comptroller.

    (a) Notice of submission to the Comptroller. When the Comptroller 
determines that the record in the proceeding is complete, the 
Comptroller shall serve notice upon the parties that the proceeding has 
been submitted to the Comptroller for final decision.
    (b) Oral argument before the Comptroller. Upon the initiative of 
the Comptroller or on the written request of any party filed with the 
Comptroller within the time for filing exceptions, the Comptroller may 
order and hear oral argument on the recommended findings, conclusions, 
decision, and order of the administrative law judge. A written request 
by a party must show good cause for oral argument and state reasons why 
arguments cannot be presented adequately in writing. A denial of a 
request for oral argument may be set forth in the Comptroller's final 
decision. Oral argument before the Comptroller must be on the record.
    (c) Comptroller's final decision. (1) Decisional employees may 
advise and assist the Comptroller in the consideration and disposition 
of the case. The final decision of the Comptroller will be based upon 
review of the entire record of the proceeding, except that the 
Comptroller may limit the issues to be reviewed to those findings and 
conclusions to which opposing arguments or exceptions have been filed 
by the parties.
    (2) The Comptroller shall render a final decision within 90 days 
after notification of the parties that the case has been submitted for 
final decision, or 90 days after oral argument, whichever is later, 
unless the Comptroller orders that the action or any aspect thereof be 
remanded to the administrative law judge for further proceedings. 
Copies of the final decision and order of the Comptroller shall be 
served upon each party to the proceeding, upon other persons required 
by statute, and, if directed by the Comptroller or required by statute, 
upon any appropriate state or Federal supervisory authority.


Sec.  109.41  Stays pending judicial review.

    The commencement of proceedings for judicial review of a final 
decision and order of the OCC may not, unless specifically ordered by 
the Comptroller or a reviewing court, operate as a stay of any order 
issued by the Comptroller. The Comptroller may, in its discretion, and 
on such terms as it finds just, stay the effectiveness of all or any 
part of its order pending a final decision on a petition for review of 
the order.

Subpart B--Local Rules


Sec.  109.100  Scope.

    The rules and procedures in this subpart B shall apply to those 
proceedings covered by subpart A of this part. In addition, subpart A 
of this part and this subpart shall apply to adjudicatory proceedings 
for which hearings on the record are provided for by the following 
statutory provisions:
    (a) Proceedings under section 10(a)(2)(D) of the HOLA (12 U.S.C. 
1467a(a)(2)(D)) to determine whether any person directly or indirectly 
exercises a controlling influence over the management or policies of a 
savings association or any other company; and
    (b) [Reserved]
    (c) Proceedings under section 15(c)(4) of the Securities and 
Exchange Act of 1934 (15 U.S.C. 78o(c)(4)) (Exchange Act) to determine 
whether any Federal savings association or person subject to the 
jurisdiction of the OCC pursuant to section 12(i) of the Exchange Act 
(15 U.S.C. 78 l (i)) has failed to comply with the provisions of 
sections 12, 13, 14(a), 14(c), 14(d) or 14(f) of the Exchange Act.


Sec.  109.101  Appointment of Office of Financial Institution 
Adjudication.

    Unless otherwise directed by the OCC, all hearings under subpart A 
of this part and this subpart shall be conducted by administrative law 
judges under the direction of the Office of Financial Institution 
Adjudication.


Sec.  109.102  Discovery.

    (a) In general. A party may take the deposition of an expert, or of 
a person, including another party, who has direct knowledge of matters 
that are non-privileged, relevant and material to the proceeding and 
where there is a need for the deposition. The deposition of experts 
shall be limited to those experts who are expected to testify at the 
hearing.
    (b) Notice. A party desiring to take a deposition shall give 
reasonable notice in writing to the deponent and to every other party 
to the proceeding. The notice must state the time and place for taking 
the deposition and the name and address of the person to be deposed.
    (c) Time limits. A party may take depositions at any time after the 
commencement of the proceeding, but no later than ten days before the 
scheduled hearing date, except with permission of the administrative 
law judge for good cause shown.
    (d) Conduct of the deposition. The witness must be duly sworn, and 
each party shall have the right to examine the witness with respect to 
all non-privileged, relevant and material matters of which the witness 
has factual, direct and personal knowledge.
    Objections to questions or exhibits shall be in short form, stating 
the grounds for objection. Failure to object to questions or exhibits 
is not a waiver except where the grounds for the objection might have 
been avoided if the objection had been timely presented. The court 
reporter shall transcribe or otherwise record the witness's testimony, 
as agreed among the parties.
    (e) Protective orders. At any time after notice of a deposition has 
been given, a party may file a motion for the issuance of a protective 
order. Such protective order may prohibit, terminate, or limit the 
scope or manner of the taking of a deposition. The administrative law 
judge shall grant such protective order upon a showing of sufficient 
grounds, including that the deposition:
    (1) Is unreasonable, oppressive, excessive in scope, or unduly 
burdensome;
    (2) Involves privileged, investigative, trial preparation, 
irrelevant or immaterial matters; or
    (3) Is being conducted in bad faith or in such manner as to 
unreasonably annoy, embarrass, or oppress the deponent.
    (f) Fees. Deposition witnesses, including expert witnesses, shall 
be paid the same expenses in the same manner as are paid witnesses in 
the district courts of the United States in proceedings in which the 
United States Government is a party. Expenses in accordance with this 
paragraph shall be paid by the party seeking to take the deposition.
    (g) Deposition subpoenas--(1) Issuance. At the request of a party, 
the administrative law judge shall issue a subpoena requiring the 
attendance of a witness at a deposition. The attendance of a witness 
may be required from any

[[Page 89905]]

place in any state or territory that is subject to the jurisdiction of 
the United States or as otherwise permitted by law.
    (2) Service. The party requesting the subpoena must serve it on the 
person named therein or upon that person's counsel, by any of the 
methods identified in Sec.  109.11(d) of this part. The party serving 
the subpoena must file proof of service with the administrative law 
judge.
    (3) Motion to quash. A person named in the subpoena or a party may 
file a motion to quash or modify the subpoena. A statement of the 
reasons for the motion must accompany it and a copy of the motion must 
be served on the party that requested the subpoena. The motion must be 
made prior to the time for compliance specified in the subpoena and not 
more than ten days after the date of service of the subpoena, or if the 
subpoena is served within 15 days of the hearing, within five days 
after the date of service.
    (4) Enforcement of deposition subpoena. Enforcement of a deposition 
subpoena shall be in accordance with the procedures of Sec.  109.27(d) 
of this part.


Sec.  109.103  Civil money penalties.

    (a) Assessment. In the event of consent, or if upon the record 
developed at the hearing the OCC finds that any of the grounds 
specified in the notice issued pursuant to Sec.  109.18 of this part 
have been established, the OCC may serve an order of assessment of 
civil money penalty upon the party concerned. The assessment order 
shall be effective immediately upon service or upon such other date as 
may be specified therein and shall remain effective and enforceable 
until it is stayed, modified, terminated, or set aside by the OCC or by 
a reviewing court.
    (b) Payment. (1) Civil penalties assessed pursuant to subpart A of 
this part and this subpart B are payable and to be collected within 60 
days after the issuance of the notice of assessment, unless the OCC 
fixes a different time for payment where it determines that the purpose 
of the civil money penalty would be better served thereby; however, if 
a party has made a timely request for a hearing to challenge the 
assessment of the penalty, the party may not be required to pay such 
penalty until the OCC has issued a final order of assessment following 
the hearing. In such instances, the penalty shall be paid within 60 
days of service of such order unless the OCC fixes a different time for 
payment. Notwithstanding the foregoing, the OCC may seek to attach the 
party's assets or to have a receiver appointed to secure payment of the 
potential civil money penalty or other obligation in advance of the 
hearing in accordance with section 8(i)(4) of the FDIA (12 U.S.C. 
1818(i)(4)).
    (2) Checks in payment of civil penalties shall be made payable to 
the Treasurer of the United States and sent to the OCC. Upon receipt, 
the OCC shall forward the check to the Treasury of the United States.
    (c) Maximum amount of civil money penalties--(1) Statutory formula. 
The OCC is required by statute to annually adjust for inflation the 
maximum amount of each civil money penalty within its jurisdiction to 
administer. The inflation adjustment is calculated by multiplying the 
maximum dollar amount of the civil money penalty for the previous 
calendar year by the cost-of-living inflation adjustment multiplier 
provided annually by the Office of Management and Budget and rounding 
the total to the nearest dollar.
    (2) Notice of inflation adjustments. The OCC will publish notice in 
the Federal Register of the maximum penalties which may be assessed on 
an annual basis on, or before, January 15 of each calendar year based 
on the formula in paragraph (a) of this section, for penalties assessed 
on, or after, the date of publication of the most recent notice related 
to conduct occurring on or after November 2, 2015.


Sec.  109.104  Additional procedures.

    (a) Replies to exceptions. Replies to written exceptions to the 
administrative law judge's recommended decision, findings, conclusions 
or proposed order pursuant to Sec.  109.39 of this part shall be filed 
within 10-days of the date such written exceptions were required to be 
filed.
    (b) Motions. All motions shall be filed with the administrative law 
judge and an additional copy shall be filed with the OCC Hearing Clerk 
who receives adjudicatory filings; provided, however, that once the 
administrative law judge has certified the record to the Comptroller 
pursuant to Sec.  109.38 of this part, all motions must be filed with 
the Comptroller to the attention of the Hearing Clerk within the 10-day 
period following the filing of exceptions allowed for the filing of 
replies to exceptions. Responses to such motions filed in a timely 
manner with the Comptroller, other than motions for oral argument 
before the Comptroller, shall be allowed pursuant to the procedures at 
Sec.  109.23(d) of this part. No response is required for the 
Comptroller to make a determination on a motion for oral argument.
    (c) Authority of administrative law judge. In addition to the 
powers listed in Sec.  109.5 of this part, the administrative law judge 
shall have the authority to deny any dispositive motion and shall 
follow the procedures set forth for motions for summary disposition at 
Sec.  109.29 of this part and partial summary disposition at Sec.  
109.30 of this part in making determinations on such motions.
    (d) Notification of submission of proceeding to the Comptroller. 
Upon the expiration of the time for filing any exceptions, any replies 
to such exceptions or any motions and any ruling thereon, and after 
receipt of certified record, the OCC shall notify the parties within 
ten days of the submission of the proceeding to the Comptroller for 
final determination.
    (e) Extensions of time for final determination. The Comptroller 
may, sua sponte, extend the time for final determination by signing an 
order of extension of time within the 90-day time period and notifying 
the parties of such extension thereafter.
    (f) Service upon the OCC. Service of any document upon the OCC 
shall be made by filing with the Hearing Clerk, in addition to the 
individuals and/or offices designated by the OCC in its Notice issued 
pursuant to Sec.  109.18 of this part, or such other means reasonably 
suited to provide notice of the person and/or offices designated to 
receive filings.
    (g) Filings with the Comptroller. An additional copy of all 
materials required or permitted to be filed with or referred to the 
administrative law judge pursuant to subpart A and B of this part shall 
be filed with the Hearing Clerk. This rule shall not apply to the 
transcript of testimony and exhibits adduced at the hearing or to 
proposed exhibits submitted in advance of the hearing pursuant to an 
order of the administrative law judge under Sec.  109.32 of this part. 
Materials required or permitted to be filed with or referred to the 
Comptroller pursuant to subparts A and B of this part shall be filed 
with the Comptroller, to the attention of the Hearing Clerk.
    (h) Presence of cameras and other recording devices. The use of 
cameras and other recording devices, other than those used by the court 
reporter, shall be prohibited and excluded from the proceedings.

[[Page 89906]]

PART 112--RULES FOR INVESTIGATIVE PROCEEDINGS AND FORMAL 
EXAMINATION PROCEEDINGS

    Authority: 12 U.S.C. 1462a, 1463, 1464, 1467, 1467a, 1813, 
1817(j), 1818(n), 1820(c), 5412(b)(2)(B); 15 U.S.C. 78l.


Sec.  112.1  Scope of part.

    This part prescribes rules of practice and procedure applicable to 
the conduct of formal examination proceedings with respect to Federal 
savings associations and their affiliates under section 5(d)(1)(B) of 
the HOLA, as amended, 12 U.S.C. 1464(d)(1)(B) or section 7(j)(15) of 
the Federal Deposit Insurance Act, as amended, 12 U.S.C. 1817(j)(15) 
(``FDIA''), section 8(n) of the FDIA, 12 U.S.C. 1818(n), or section 
10(c) of the FDIA, 12 U.S.C. 1820(c). This part does not apply to 
adjudicatory proceedings as to which hearings are required by statute, 
the rules for which are contained in part 109 of this chapter.


Sec.  112.2  Definitions.

    As used in this part:
    (a) OCC means the Office of the Comptroller of the Currency;
    (b) [Reserved]
    (c) Formal examination proceeding means the administration of oaths 
and affirmations, taking and preserving of testimony, requiring the 
production of books, papers, correspondence, memoranda, and all other 
records, the issuance of subpoenas, and all related activities in 
connection with examination of savings associations and their 
affiliates conducted pursuant to section 5(d)(1)(B) of the HOLA, 
section 7(j)(15) of the FDIA, section 8(n) of the FDIA or section 10(c) 
of the FDIA; and
    (d) Designated representative means the person or persons empowered 
by the OCC to conduct an investigative proceeding or a formal 
examination proceeding.


Sec.  112.3  Confidentiality of proceedings.

    All formal examination proceedings shall be private and, unless 
otherwise ordered by the OCC, all investigative proceedings shall also 
be private. Unless otherwise ordered or permitted by the OCC, or 
required by law, and except as provided in Sec. Sec.  112.4 and 112.5, 
the entire record of any investigative proceeding or formal examination 
proceeding, including the resolution of the OCC or its delegate(s) 
authorizing the proceeding, the transcript of such proceeding, and all 
documents and information obtained by the designated representative(s) 
during the course of said proceedings shall be confidential.


Sec.  112.4  Transcripts.

    Transcripts or other recordings, if any, of investigative 
proceedings or formal examination proceedings shall be prepared solely 
by an official reporter or by any other person or means authorized by 
the designated representative. A person who has submitted documentary 
evidence or given testimony in an investigative proceeding or formal 
examination proceeding may procure a copy of his own documentary 
evidence or transcript of his own testimony upon payment of the cost 
thereof; provided, that a person seeking a transcript of his own 
testimony must file a written request with the OCC's Director for 
Enforcement stating the reason he desires to procure such transcript, 
and said persons may for good cause deny such request. In any event, 
any witness (or his counsel) shall have the right to inspect the 
transcript of the witness' own testimony.


Sec.  112.5  Rights of witnesses.

    (a) Any person who is compelled or requested to furnish documentary 
evidence or give testimony at an investigative proceeding or formal 
examination proceeding shall have the right to examine, upon request, 
the OCC resolution authorizing such proceeding. Copies of such 
resolution shall be furnished, for their retention, to such persons 
only with the written approval of the OCC.
    (b) Any witness at an investigative proceeding or formal 
examination proceeding may be accompanied and advised by an attorney 
personally representing that witness.
    (1) Such attorney shall be a member in good standing of the bar of 
the highest court of any state, Commonwealth, possession, territory, or 
the District of Columbia, who has not been suspended or debarred from 
practice by the bar of any such political entity or before the OCC in 
accordance with the provisions of part 19 of this chapter and has not 
been excluded from the particular investigative proceeding or formal 
examination proceeding in accordance with paragraph (b)(3) of this 
section.
    (2) Such attorney may advise the witness before, during, and after 
the taking of his testimony and may briefly question the witness, on 
the record, at the conclusion of his testimony, for the sole purpose of 
clarifying any of the answers the witness has given. During the taking 
of the testimony of a witness, such attorney may make summary notes 
solely for his use in representing his client. All witnesses shall be 
sequestered, and, unless permitted in the discretion of the designated 
representative, no witness or accompanying attorney may be permitted to 
be present during the taking of testimony of any other witness called 
in such proceeding. Neither attorney(s) for the association(s) that are 
the subjects of the investigative proceedings or formal examination 
proceedings, nor attorneys for any other interested persons, shall have 
any right to be present during the testimony of any witness not 
personally being represented by such attorney.
    (3) The OCC, for good cause, may exclude a particular attorney from 
further participation in any investigation in which the OCC has found 
the attorney to have engaged in dilatory, obstructionist, egregious, 
contemptuous or contumacious conduct. The person conducting an 
investigation may report to the OCC instances of apparently dilatory, 
obstructionist, egregious, contemptuous or contumacious conduct on the 
part of an attorney. After due notice to the attorney, the OCC may take 
such action as the circumstances warrant based upon a written record 
evidencing the conduct of the attorney in that investigation or such 
other or additional written or oral presentation as the OCC may permit 
or direct.


Sec.  112.6  Obstruction of the proceedings.

    The designated representative shall report to the Comptroller any 
instances where any witness or counsel has engaged in dilatory, 
obstructionist, or contumacious conduct or has otherwise violated any 
provision of this part during the course of an investigative proceeding 
or formal examination proceeding; and the OCC may take such action as 
the circumstances warrant, including the exclusion of counsel from 
further participation in such proceeding.


Sec.  112.7  Subpoenas.

    (a) Service. Service of a subpoena in connection with any 
investigative proceeding or formal examination proceeding shall be 
effected in the following manner:
    (1) Service upon a natural person. Service of a subpoena upon a 
natural person may be effected by handing it to such person; by leaving 
it at his office with the person in charge thereof, or, if there is no 
one in charge, by leaving it in a conspicuous place therein; by leaving 
it at his dwelling place or usual place of abode with some person of 
suitable age and discretion then residing therein; by mailing it to him 
by registered or certified mail or by an express delivery service at 
his last

[[Page 89907]]

known address; or by any method whereby actual notice is given to him.
    (2) Service upon other persons. When the person to be served is not 
a natural person, service of the subpoena may be effected by handing 
the subpoena to a registered agent for service, or to any officer, 
director, or agent in charge of any office of such person; by mailing 
it to any such representative by registered or certified mail or by an 
express delivery service at his last known address; or by any method 
whereby actual notice is given to such person.
    (b) Motions to quash. Any person to whom a subpoena is directed 
may, prior to the time specified therein for compliance, but in no 
event more than 10 days after the date of service of such subpoena, 
apply to the Deputy Chief Counsel or his designee to quash or modify 
such subpoena, accompanying such application with a statement of the 
reasons therefor. The Deputy Chief Counsel or his designee, as 
appropriate, may:
    (1) Deny the application;
    (2) Quash or revoke the subpoena;
    (3) Modify the subpoena; or
    (4) Condition the granting of the application on such terms as the 
Deputy Chief Counsel or his designee determines to be just, reasonable, 
and proper.
    (c) Attendance of witnesses. Subpoenas issued in connection with an 
investigative proceeding or formal examination proceeding may require 
the attendance and/or testimony of witnesses from any state or 
territory of the United States and the production by such witnesses of 
documentary or other tangible evidence at any designated place where 
the proceeding is being (or is to be) conducted. Foreign nationals are 
subject to such subpoenas if such service is made upon a duly 
authorized agent located in the United States.
    (d) Witness fees and mileage. Witnesses summoned in any proceeding 
under this part shall be paid the same fees and mileage that are paid 
witnesses in the district courts of the United States. Such fees and 
mileage need not be tendered when the subpoena is issued on behalf of 
the OCC by any of its designated representatives.

PART 165--PROMPT CORRECTIVE ACTION

    Authority: 12 U.S.C. 1831o, 5412(b)(2)(B).


Sec. Sec.  165.1-165.7  [Reserved]


Sec.  165.8  Procedures for reclassifying a Federal savings association 
based on criteria other than capital.

    (a) Reclassification based on unsafe or unsound condition or 
practice--(1) Issuance of notice of proposed reclassification--(i) 
Grounds for reclassification. (A) Pursuant to 12 CFR 6.4(d), the OCC 
may reclassify a well capitalized Federal savings association as 
adequately capitalized or subject an adequately capitalized or 
undercapitalized institution to the supervisory actions applicable to 
the next lower capital category if:
    (1) The OCC determines that the savings association is in an unsafe 
or unsound condition; or
    (2) The OCC deems the savings association to be engaged in an 
unsafe or unsound practice and not to have corrected the deficiency.
    (B) Any action pursuant to this paragraph (a)(1)(i) shall 
hereinafter be referred to as ``reclassification.''
    (ii) Prior notice to institution. Prior to taking action pursuant 
to 12 CFR 6.4(d), the OCC shall issue and serve on the Federal savings 
association a written notice of the OCC's intention to reclassify the 
savings association.
    (2) Contents of notice. A notice of intention to reclassify a 
Federal savings association based on unsafe or unsound condition shall 
include:
    (i) A statement of the savings association's capital measures and 
capital levels and the category to which the savings association would 
be reclassified;
    (ii) The reasons for reclassification of the savings association;
    (iii) The date by which the savings association subject to the 
notice of reclassification may file with the OCC a written appeal of 
the proposed reclassification and a request for a hearing, which shall 
be at least 14 calendar days from the date of service of the notice 
unless the OCC determines that a shorter period is appropriate in light 
of the financial condition of the savings association or other relevant 
circumstances.
    (3) Response to notice of proposed reclassification. A Federal 
savings association may file a written response to a notice of proposed 
reclassification within the time period set by the OCC. The response 
should include:
    (i) An explanation of why the savings association is not in unsafe 
or unsound condition or otherwise should not be reclassified; and
    (ii) Any other relevant information, mitigating circumstances, 
documentation, or other evidence in support of the position of the 
savings association or company regarding the reclassification.
    (4) Failure to file response. Failure by a Federal savings 
association to file, within the specified time period, a written 
response with the OCC to a notice of proposed reclassification shall 
constitute a waiver of the opportunity to respond and shall constitute 
consent to the reclassification.
    (5) Request for hearing and presentation of oral testimony or 
witnesses. The response may include a request for an informal hearing 
before the OCC or its designee under this section. If the Federal 
savings association desires to present oral testimony or witnesses at 
the hearing, the savings association shall include a request to do so 
with the request for an informal hearing. A request to present oral 
testimony or witnesses shall specify the names of the witnesses and the 
general nature of their expected testimony. Failure to request a 
hearing shall constitute a waiver of any right to a hearing, and 
failure to request the opportunity to present oral testimony or 
witnesses shall constitute a waiver of any right to present oral 
testimony or witnesses.
    (6) Order for informal hearing. Upon receipt of a timely written 
request that includes a request for a hearing, the OCC shall issue an 
order directing an informal hearing to commence no later than 30 days 
after receipt of the request, unless the OCC allows further time at the 
request of the Federal savings association. The hearing shall be held 
in Washington, DC or at such other place as may be designated by the 
OCC, before a presiding officer(s) designated by the OCC to conduct the 
hearing.
    (7) Hearing procedures. (i) The Federal savings association shall 
have the right to introduce relevant written materials and to present 
oral argument at the hearing. The savings association may introduce 
oral testimony and present witnesses only if expressly authorized by 
the OCC or the presiding officer(s). Neither the provisions of the 
Administrative Procedure Act (5 U.S.C. 554-557) governing adjudications 
required by statute to be determined on the record nor parts 19 or 109 
of this chapter apply to an informal hearing under this section unless 
the OCC orders that such procedures shall apply.
    (ii) The informal hearing shall be recorded and a transcript 
furnished to the savings association upon request and payment of the 
cost thereof. Witnesses need not be sworn, unless specifically 
requested by a party or the presiding officer(s). The presiding 
officer(s) may ask questions of any witness.
    (iii) The presiding officer(s) may order that the hearing be 
continued for a reasonable period (normally five business days) 
following completion of oral testimony or argument to allow

[[Page 89908]]

additional written submissions to the hearing record.
    (8) Recommendation of presiding officers. Within 20 calendar days 
following the date the hearing and the record on the proceeding are 
closed, the presiding officer(s) shall make a recommendation to the OCC 
on the reclassification.
    (9) Time for decision. Not later than 60 calendar days after the 
date the record is closed or the date of the response in a case where 
no hearing was requested, the OCC will decide whether to reclassify the 
Federal savings association and notify the savings association of the 
OCC's decision.
    (b) Request for rescission of reclassification. Any Federal savings 
association that has been reclassified under this section, may, upon a 
change in circumstances, request in writing that the OCC reconsider the 
reclassification, and may propose that the reclassification be 
rescinded and that any directives issued in connection with the 
reclassification be modified, rescinded, or removed. Unless otherwise 
ordered by the OCC, the savings association shall remain subject to the 
reclassification and to any directives issued in connection with that 
reclassification while such request is pending before the OCC.


Sec.  165.9  Order to dismiss a director or senior executive officer.

    (a) Service of notice. When the OCC issues and serves a directive 
on a Federal savings association pursuant to subpart B of part 6 of 
this chapter requiring the savings association to dismiss any director 
or senior executive officer under section 38(f)(2)(F)(ii) of the FDI 
Act, the OCC shall also serve a copy of the directive, or the relevant 
portions of the directive where appropriate, upon the person to be 
dismissed.
    (b) Response to directive--(1) Request for reinstatement. A 
director or senior executive officer who has been served with a 
directive under paragraph (a) of this section (Respondent) may file a 
written request for reinstatement. The request for reinstatement shall 
be filed within 10 calendar days of the receipt of the directive by the 
Respondent, unless further time is allowed by the OCC at the request of 
the Respondent.
    (2) Contents of request; informal hearing. The request for 
reinstatement should include reasons why the Respondent should be 
reinstated, and may include a request for an informal hearing before 
the OCC or its designee under this section. If the Respondent desires 
to present oral testimony or witnesses at the hearing, the Respondent 
shall include a request to do so with the request for an informal 
hearing. The request to present oral testimony or witnesses shall 
specify the names of the witnesses and the general nature of their 
expected testimony. Failure to request a hearing shall constitute a 
waiver of any right to a hearing and failure to request the opportunity 
to present oral testimony or witnesses shall constitute a waiver of any 
right or opportunity to present oral testimony or witnesses.
    (3) Effective date. Unless otherwise ordered by the OCC, the 
dismissal shall remain in effect while a request for reinstatement is 
pending.
    (c) Order for informal hearing. Upon receipt of a timely written 
request from a Respondent for an informal hearing on the portion of a 
directive requiring a Federal savings association to dismiss from 
office any director or senior executive officer, the OCC shall issue an 
order directing an informal hearing to commence no later than 30 days 
after receipt of the request, unless the Respondent requests a later 
date. The hearing shall be held in Washington, DC, or at such other 
place as may be designated by the OCC, before a presiding officer(s) 
designated by the OCC to conduct the hearing.
    (d) Hearing procedures. (1) A Respondent may appear at the hearing 
personally or through counsel. A Respondent shall have the right to 
introduce relevant written materials and to present oral argument. A 
Respondent may introduce oral testimony and present witnesses only if 
expressly authorized by the OCC or the presiding officer(s). Neither 
the provisions of the Administrative Procedure Act governing 
adjudications required by statute to be determined on the record nor 
parts 19 or 109 of this chapter apply to an informal hearing under this 
section unless the OCC orders that such procedures shall apply.
    (2) The informal hearing shall be recorded and a transcript 
furnished to the Respondent upon request and payment of the cost 
thereof. Witnesses need not be sworn, unless specifically requested by 
a party or the presiding officer(s). The presiding officer(s) may ask 
questions of any witness.
    (3) The presiding officer(s) may order that the hearing be 
continued for a reasonable period (normally five business days) 
following completion of oral testimony or argument to allow additional 
written submissions to the hearing record.
    (e) Standard for review. A Respondent shall bear the burden of 
demonstrating that his or her continued employment by or service with 
the Federal savings association would materially strengthen the savings 
association's ability:
    (1) To become adequately capitalized, to the extent that the 
directive was issued as a result of the savings association's capital 
level or failure to submit or implement a capital restoration plan; and
    (2) To correct the unsafe or unsound condition or unsafe or unsound 
practice, to the extent that the directive was issued as a result of 
classification of the savings association based on supervisory criteria 
other than capital, pursuant to section 38(g) of the FDI Act.
    (f) Recommendation of presiding officers. Within 20 calendar days 
following the date the hearing and the record on the proceeding are 
closed, the presiding officer(s) shall make a recommendation to the OCC 
concerning the Respondent's request for reinstatement with the Federal 
savings association.
    (g) Time for decision. Not later than 60 calendar days after the 
date the record is closed or the date of the response in a case where 
no hearing has been requested, the OCC shall grant or deny the request 
for reinstatement and notify the Respondent of the OCC's decision. If 
the OCC denies the request for reinstatement, the OCC shall set forth 
in the notification the reasons for the OCC's action.


Sec.  165.10  [Reserved]

PART 108--[REMOVED]

0
11. Part 108 is removed.

PART 109--[REMOVED]

0
12. Part 109 is removed.

PART 112--[REMOVED]

0
13. Part 112 is removed.

PART 150--FIDUCIARY POWERS OF FEDERAL SAVINGS ASSOCIATIONS

0
14. The authority citation for part 150 continues to read as follows:

    Authority: 12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B).


Sec.  150.570  [Amended]

0
15. Section 150.570 is amended by removing the words ``part 109'' and 
adding in their place the words ``part 19''.

PART 165--[REMOVED]

0
16. Part 165 is removed.

[[Page 89909]]

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

    For the reasons stated in the joint preamble, the Board amends 
parts 238 and 263 in title 12 of the Code of Federal Regulations as 
follows:

PART 238--SAVINGS AND LOAN HOLDING COMPANIES

0
17. The authority citation for part 238 continues to read as follows:

    Authority:  5 U.S.C. 552, 559; 12 U.S.C. 1462, 1462a, 1463, 
1464, 1467, 1467a, 1468, 5365; 1813, 1817, 1829e, 1831i, 1972, 15 
U.S.C. 78l.

Subpart L--[Removed and Reserved]

0
18. Remove and reserve subpart L, consisting of Sec. Sec.  238.111 
through 238.117.

PART 263--RULES OF PRACTICE FOR HEARINGS

0
19. The authority citation for part 263 is revised to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 248, 324, 334, 347a, 
504, 505, 1464, 1467, 1467a, 1817(j), 1818, 1820(k), 1829, 1831o, 
1831p-1, 1832(c), 1847(b), 1847(d), 1884, 1972(2)(F), 3105, 3108, 
3110, 3349, 3907, 3909(d), 4717, 5323, 5362, 5365, 5463, 5464, 5466, 
5467; 15 U.S.C. 21, 78l(i), 78o-4, 78o-5, 78u-2; 1639e(K); 28 U.S.C. 
2461 note; 31 U.S.C. 5321; and 42 U.S.C. 4012a.

0
20. Subparts A and B are revised to read as follows:

PART 263--RULES OF PRACTICE FOR HEARINGS

Subpart A--Uniform Rules of Practice and Procedure
Sec.
263.1 Scope.
263.2 Rules of construction.
263.3 Definitions.
263.4 Authority of the Board.
263.5 Authority of the administrative law judge (ALJ).
263.6 Appearance and practice in adjudicatory proceedings.
263.7 Good faith certification.
263.8 Conflicts of interest.
263.9 Ex parte communications.
263.10 Filing of papers.
263.11 Service of papers.
263.12 Construction of time limits.
263.13 Change of time limits.
263.14 Witness fees and expenses.
263.15 Opportunity for informal settlement.
263.16 The Board's right to conduct examination.
263.17 Collateral attacks on adjudicatory proceeding.
263.18 Commencement of proceeding and contents of notice.
263.19 Answer.
263.20 Amended pleadings.
263.21 Failure to appear.
263.22 Consolidation and severance of actions.
263.23 Motions.
263.24 Scope of document discovery.
263.25 Request for document discovery from parties.
263.26 Document subpoenas to nonparties.
263.27 Deposition of witness unavailable for hearing.
263.28 Interlocutory review.
263.29 Summary disposition.
263.30 Partial summary disposition.
263.31 Scheduling and prehearing conferences.
263.32 Prehearing submissions.
263.33 Public hearings.
263.34 Hearing subpoenas.
263.35 Conduct of hearings.
263.36 Evidence.
263.37 Post-hearing filings.
263.38 Recommended decision and filing of record.
263.39 Exceptions to recommended decision.
263.40 Review by the Board.
263.41 Stays pending judicial review.
Subpart B--Board Local Rules Supplementing the Uniform Rules
263.50 Purpose and scope.
263.51 Definitions.
263.52 Address for filing.
263.53 Discovery depositions.
263.54 Delegation to the Office of Financial Institution 
Adjudication.
263.55 Board as Presiding Officer.
263.56 Initial licensing proceedings.
263.57 Sanctions relating to conduct in an adjudicatory proceeding.

Subpart A--Uniform Rules of Practice and Procedure


Sec.  263.1  Scope.

    This subpart prescribes Uniform Rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record after opportunity for a hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal 
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the Board of Governors of 
the Federal Reserve System (``Board'') should issue an order to approve 
or disapprove a person's proposed acquisition of a state member bank, 
bank holding company, or savings and loan holding company;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions 
upon any government securities broker or dealer or upon any person 
associated or seeking to become associated with a government securities 
broker or dealer for which the Board is the appropriate agency;
    (e) Assessment of civil money penalties by the Board against 
institutions, institution-affiliated parties, and certain other persons 
for which the Board is the appropriate agency for any violation of:
    (1) Any provision of the Bank Holding Company Act of 1956, as 
amended (``BHC Act''), or any order or regulation issued thereunder, 
pursuant to 12 U.S.C. 1847(b) and (d);
    (2) Sections 19, 22, 23, 23A and 23B of the Federal Reserve Act 
(``FRA''), or any regulation or order issued thereunder and certain 
unsafe or unsound practices or breaches of fiduciary duty, pursuant to 
12 U.S.C. 504 and 505;
    (3) Section 9 of the FRA pursuant to 12 U.S.C. 324;
    (4) Section 106(b) of the Bank Holding Company Act Amendments of 
1970 and certain unsafe or unsound practices or breaches of fiduciary 
duty, pursuant to 12 U.S.C. 1972(2)(F);
    (5) Any provision of the Change in Bank Control Act of 1978, as 
amended, or any regulation or order issued thereunder and certain 
unsafe or unsound practices or breaches of fiduciary duty, pursuant to 
12 U.S.C. 1817(j)(16);
    (6) Any provision of the International Lending Supervision Act of 
1983 (``ILSA'') or any rule, regulation or order issued thereunder, 
pursuant to 12 U.S.C. 3909;
    (7) Any provision of the International Banking Act of 1978 
(``IBA'') or any rule, regulation or order issued thereunder, pursuant 
to 12 U.S.C. 3108;
    (8) Certain provisions of the Exchange Act, pursuant to section 21B 
of the Exchange Act (15 U.S.C. 78u-2);
    (9) Section 1120 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (12 U.S.C. 3349), or any order or 
regulation issued thereunder;
    (10) The terms of any final or temporary order issued under section 
8 of the FDIA or of any written agreement executed by the Board or the 
former Office of Thrift Supervision (``OTS''), the terms of any 
condition imposed in writing by the Board or the former OTS in 
connection with the grant of an application or request, and certain 
unsafe or unsound practices or breaches of fiduciary duty or law or 
regulation pursuant to 12 U.S.C. 1818(i)(2);
    (11) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder;

[[Page 89910]]

    (12) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued thereunder;
    (13) Section 5 of the Home Owners' Loan Act (``HOLA'') or any 
regulation or order issued thereunder, pursuant to 12 U.S.C. 1464(d), 
(s) and (v);
    (14) Section 9 of the HOLA or any regulation or order issued 
thereunder, pursuant to 12 U.S.C. 1467(d); and
    (15) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a(i) and 
(r);
    (f) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g));
    (g) Removal, prohibition, and civil monetary penalty proceedings 
under section 10(k) of the FDIA (12 U.S.C. 1820(k)) for violations of 
the post-employment restrictions imposed by that section; and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules (see Sec.  263.3(i)).


Sec.  263.2  Rules of construction.

    For purposes of this subpart:
    (a) Any term in the singular includes the plural, and the plural 
includes the singular, if such use would be appropriate;
    (b) The term counsel includes a non-attorney representative; and
    (c) Unless the context requires otherwise, a party's counsel of 
record, if any, may, on behalf of that party, take any action required 
to be taken by the party.


Sec.  263.3  Definitions.

    For purposes of this subpart, unless explicitly stated to the 
contrary:
    (a) Administrative law judge (ALJ) means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (c) Decisional employee means any member of the Board's or ALJ's 
staff who has not engaged in an investigative or prosecutorial role in 
a proceeding and who may assist the Agency or the ALJ, respectively, in 
preparing orders, recommended decisions, decisions, and other documents 
under the Uniform Rules.
    (d) Electronic signature means electronically affixing the 
equivalent of a signature to an electronic document filed or 
transmitted electronically.
    (e) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the Board in an adjudicatory 
proceeding.
    (f) Final order means an order issued by the Board with or without 
the consent of the affected institution or the institution-affiliated 
party, that has become final, without regard to the pendency of any 
petition for reconsideration or review.
    (g) Institution includes:
    (1) Any bank as that term is defined in section 3(a) of the FDIA 
(12 U.S.C. 1813(a));
    (2) Any bank holding company or any subsidiary (other than a bank) 
of a bank holding company as those terms are defined in the BHC Act (12 
U.S.C. 1841 et seq.);
    (3) Any organization organized and operated under section 25A of 
the FRA (12 U.S.C. 611 et seq.) or operating under section 25 of the 
FRA (12 U.S.C. 601 et seq.);
    (4) Any foreign bank or company to which section 8 of the IBA (12 
U.S.C. 3106), applies or any subsidiary (other than a bank) thereof;
    (5) Any branch or agency as those terms are defined in section 1(b) 
of the IBA (12 U.S.C. 3101(1), (3), (5), (6));
    (6) Any savings and loan holding company or any subsidiary (other 
than a depository institution) of a savings and loan holding company as 
those terms are defined in the HOLA (12 U.S.C. 1461 et seq.);
    (7) Any U.S. or foreign nonbank financial company that the 
Financial Stability Oversight Council (``FSOC'') requires the Board to 
supervise under section 113 of the Dodd-Frank Act (12 U.S.C. 
5323(a)(1), (b)(1)), or any subsidiary (other than a bank) thereof;
    (8) Any financial market utility or financial institution 
conducting payment, clearing, or settlement activities that FSOC 
designates as systematically important under section 804 of the Dodd-
Frank Act (12 U.S.C. 5463); and
    (9) Any other entity subject to the supervision of the Board.
    (h) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 3(u) of the FDIA (12 U.S.C. 
1813(u)).
    (i) Local Rules means those rules promulgated by the Board in this 
part other than this subpart.
    (j) OFIA means the Office of Financial Institution Adjudication, 
the executive body charged with overseeing the administration of 
administrative enforcement proceedings for the Board, the Office of 
Comptroller of the Currency (``OCC''), the Federal Deposit Insurance 
Corporation (``FDIC''), and the National Credit Union Administration 
(``NCUA'').
    (k) Party means the Board and any person named as a party in any 
notice.
    (l) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency, or other entity or organization, including an 
institution as defined in paragraph (g) of this section.
    (m) Respondent means any party other than the Board.
    (n) Uniform Rules means those rules in this subpart A that are 
common to the Board, the OCC, the FDIC, and the NCUA.
    (o) Violation means any violation as that term is defined in 
section 3(v) of the FDIA (12 U.S.C. 1813(v)).


Sec.  263.4  Authority of the Board.

    The Board may, at any time during the pendency of a proceeding, 
perform, direct the performance of, or waive performance of, any act 
which could be done or ordered by the ALJ.


Sec.  263.5  Authority of the administrative law judge (``ALJ'').

    (a) General rule. All proceedings governed by this part must be 
conducted in accordance with the provisions of 5 U.S.C. chapter 5. The 
ALJ has all powers necessary to conduct a proceeding in a fair and 
impartial manner and to avoid unnecessary delay.
    (b) Powers. The ALJ has all powers necessary to conduct the 
proceeding in accordance with paragraph (a) of this section, including 
the following powers:
    (1) To administer oaths and affirmations;
    (2) To issue subpoenas, subpoenas duces tecum, protective orders, 
and other orders, as authorized by this part, and to quash or modify 
any such subpoenas and orders;
    (3) To receive relevant evidence and to rule upon the admission of 
evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
subpart;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling and/or pre-hearing conferences as set forth 
in Sec.  263.31;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the Board 
has the power to grant any motion to dismiss the proceeding or to 
decide any other motion that results in a final determination of the 
merits of the proceeding;
    (8) To prepare and present to the Board a recommended decision as 
provided in this section;
    (9) To recuse oneself by motion made by a party or on the ALJ's own 
motion;

[[Page 89911]]

    (10) To establish time, place and manner limitations on the 
attendance of the public and the media for any public hearing; and
    (11) To do all other things necessary and appropriate to discharge 
the duties of an ALJ.


Sec.  263.6  Appearance and practice in adjudicatory proceedings.

    (a) Appearance before the Board or an ALJ--(1) By attorneys. Any 
member in good standing of the bar of the highest court of any state, 
commonwealth, possession, territory of the United States, or the 
District of Columbia may represent others before the Board if such 
attorney is not currently suspended or debarred from practice before 
the Board.
    (2) By non-attorneys. An individual may appear on the individual's 
own behalf.
    (3) Notice of appearance. (i) Any individual acting on the 
individual's own behalf or as counsel on behalf of a party, including 
the Board, must file a notice of appearance with OFIA at or before the 
time that the individual submits papers or otherwise appears on behalf 
of a party in the adjudicatory proceeding. The notice of appearance 
must include:
    (A) A written declaration that the individual is currently 
qualified as provided in paragraph (a)(1) or (2) of this section and is 
authorized to represent the particular party; and
    (B) A written acknowledgement that the individual has reviewed and 
will comply with the Uniform Rules and Local Rules in subpart B of this 
part.
    (ii) By filing a notice of appearance on behalf of a party in an 
adjudicatory proceeding, the counsel agrees and represents that the 
counsel is authorized to accept service on behalf of the represented 
party and that, in the event of withdrawal from representation, the 
counsel will, if required by the ALJ, continue to accept service until 
new counsel has filed a notice of appearance or until the represented 
party indicates that the party will proceed on a pro se basis.
    (b) Sanctions. Dilatory, obstructionist, egregious, contemptuous, 
or contumacious conduct at any phase of any adjudicatory proceeding may 
be grounds for exclusion or suspension of counsel from the proceeding.


Sec.  263.7  Good faith certification.

    (a) General requirement. Every filing or submission of record 
following the issuance of a notice must be signed by at least one 
counsel of record in the counsel's individual name and must state that 
counsel's mailing address, electronic mail address, and telephone 
number. A party who acts as the party's own counsel must sign that 
person's individual name and state that person's mailing address, 
electronic mail address, and telephone number on every filing or 
submission of record. Electronic signatures may be used to satisfy the 
signature requirements of this section.
    (b) Effect of signature. (1) The signature of counsel or a party 
will constitute a certification: the counsel or party has read the 
filing or submission of record; to the best of the counsel's or party's 
knowledge, information, and belief formed after reasonable inquiry, the 
filing or submission of record is well-grounded in fact and is 
warranted by existing law or a good faith argument for the extension, 
modification, or reversal of existing law; and the filing or submission 
of record is not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.
    (2) If a filing or submission of record is not signed, the ALJ will 
strike the filing or submission of record, unless it is signed promptly 
after the omission is called to the attention of the pleader or movant.
    (c) Effect of making oral motion or argument. The act of making any 
oral motion or oral argument by any counsel or party constitutes a 
certification that to the best of the counsel's or party's knowledge, 
information, and belief formed after reasonable inquiry, the counsel's 
or party's statements are well-grounded in fact and are warranted by 
existing law or a good faith argument for the extension, modification, 
or reversal of existing law, and are not made for any improper purpose, 
such as to harass or to cause unnecessary delay or needless increase in 
the cost of litigation.


Sec.  263.8  Conflicts of interest.

    (a) Conflict of interest in representation. No person may appear as 
counsel for another person in an adjudicatory proceeding if it 
reasonably appears that such representation may be materially limited 
by that counsel's responsibilities to a third person or by the 
counsel's own interests. The ALJ may take corrective measures at any 
stage of a proceeding to cure a conflict of interest in representation, 
including the issuance of an order limiting the scope of representation 
or disqualifying an individual from appearing in a representative 
capacity for the duration of the proceeding.
    (b) Certification and waiver. If any person appearing as counsel 
represents two or more parties to an adjudicatory proceeding or also 
represents a non-party on a matter relevant to an issue in the 
proceeding, counsel must certify in writing at the time of filing the 
notice of appearance required by Sec.  263.6(a):
    (1) That the counsel has personally and fully discussed the 
possibility of conflicts of interest with each such party and non-
party; and
    (2) That each such party and non-party waives any right it might 
otherwise have had to assert any known conflicts of interest or to 
assert any non-material conflicts of interest during the course of the 
proceeding.


Sec.  263.9  Ex parte communications.

    (a) Definition--(1) Ex parte communication. Ex parte communication 
means any material oral or written communication relevant to the merits 
of an adjudicatory proceeding that was neither on the record nor on 
reasonable prior notice to all parties that takes place between:
    (i) An interested person outside the Board (including such person's 
counsel); and
    (ii) The ALJ handling that proceeding, a member of the Board, or a 
decisional employee.
    (2) Exception. A request for status of the proceeding does not 
constitute an ex parte communication.
    (b) Prohibition of ex parte communications. From the time the 
notice is issued by the Board until the date that the Board issues a 
final decision pursuant to Sec.  263.40(c):
    (1) An interested person outside the Federal Reserve System must 
not make or knowingly cause to be made an ex parte communication to a 
member of the Board, the ALJ, or a decisional employee; and
    (2) A member of the Board, ALJ, or decisional employee may not make 
or knowingly cause to be made to any interested person outside the 
Federal Reserve System any ex parte communication.
    (c) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the ALJ, a member of the Board, or 
any other person identified in paragraph (a) of this section, that 
person will cause all such written communications (or, if the 
communication is oral, a memorandum stating the substance of the 
communication) to be placed on the record of the proceeding and served 
on all parties. All other parties to the proceeding may, within ten 
days of service of the ex parte communication, file responses thereto 
and to recommend any sanctions that they believe to be appropriate 
under the circumstances. The ALJ or the Board then determines

[[Page 89912]]

whether any action should be taken concerning the ex parte 
communication in accordance with paragraph (d) of this section.
    (d) Sanctions. Any party or counsel to a party who makes a 
prohibited ex parte communication, or who encourages or solicits 
another to make any such communication, may be subject to any 
appropriate sanction or sanctions imposed by the Board or the ALJ 
including, but not limited to, exclusion from the proceedings and an 
adverse ruling on the issue which is the subject of the prohibited 
communication.
    (e) Separation of functions--(1) In general. Except to the extent 
required for the disposition of ex parte matters as authorized by law, 
the ALJ may not:
    (i) Consult a person or party on a fact in issue unless on notice 
and opportunity for all parties to participate; or
    (ii) Be responsible to or subject to the supervision or direction 
of an employee or agent engaged in the performance of investigative or 
prosecuting functions for the Board.
    (2) Decision process. An employee or agent engaged in the 
performance of investigative or prosecuting functions for the Board in 
a case may not, in that or a factually related case, participate or 
advise in the decision, recommended decision, or agency review of the 
recommended decision under Sec.  263.40, except as witness or counsel 
in administrative or judicial proceedings.


Sec.  263.10  Filing of papers.

    (a) Filing. Any papers required to be filed, excluding documents 
produced in response to a discovery request pursuant to Sec. Sec.  
263.25 and 263.26, must be filed with OFIA, except as otherwise 
provided.
    (b) Manner of filing. Unless otherwise specified by the Board or 
the ALJ, filing may be accomplished by:
    (1) Electronic mail or other electronic means designated by the 
Board or the ALJ;
    (2) Personal service;
    (3) Delivering the papers to a same day courier service or 
overnight delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) Formal requirements as to papers filed--(1) Form. All papers 
filed must set forth the name, mailing address, electronic mail 
address, and telephone number of the counsel or party making the filing 
and must be accompanied by a certification setting forth when and how 
service has been made on all other parties. All papers filed must be 
double-spaced and printed or typewritten on an 8 1/2x11 inch page and 
must be clear and legible.
    (2) Signature. All papers must be dated and signed as provided in 
Sec.  263.7.
    (3) Caption. All papers filed must include at the head thereof, or 
on a title page, the name of the Board and of the filing party, the 
title and docket number of the proceeding, and the subject of the 
particular paper.


Sec.  263.11  Service of papers.

    (a) By the parties. Except as otherwise provided, a party filing 
papers must serve a copy upon the counsel of record for all other 
parties to the proceeding so represented, and upon any party not so 
represented.
    (b) Method of service. Except as provided in paragraphs (c)(2) and 
(d) of this section, a serving party must use one of the following 
methods of service:
    (1) Electronic mail or other electronic means;
    (2) Personal service;
    (3) Delivering the papers by same day courier service or overnight 
delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) By the Board or the ALJ. (1) All papers required to be served 
by the Board or the ALJ upon a party who has appeared in the proceeding 
in accordance with Sec.  263.6 will be served by electronic mail or 
other electronic means designated by the Board or ALJ.
    (2) If a respondent has not appeared in the proceeding in 
accordance with Sec.  263.6, the Board or the ALJ will serve the 
respondent by any of the following methods:
    (i) By personal service;
    (ii) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (iii) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
respondent;
    (iv) By registered or certified mail, delivery by a same day 
courier service, or by an overnight delivery service to the 
respondent's last known mailing address; or
    (v) By any other method reasonably calculated to give actual 
notice.
    (d) Subpoenas. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (3) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
party;
    (4) By registered or certified mail, delivery by a same day courier 
service, or by an overnight delivery service to the person's last known 
mailing address; or
    (5) By any other method reasonably calculated to give actual 
notice.
    (e) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing is held, provided that if service is made on a 
foreign bank in connection with an action or proceeding involving one 
or more of its branches or agencies located in any state, territory, 
possession of the United States, or the District of Columbia, service 
must be made on at least one branch or agency so involved.


Sec.  263.12  Construction of time limits.

    (a) General rule. In computing any period of time prescribed by 
this subpart, the date of the act or event that commences the 
designated period of time is not included. The last day so computed is 
included unless it is a Saturday, Sunday, or Federal holiday. When the 
last day is a Saturday, Sunday, or Federal holiday, the period runs 
until the end of the next day that is not a Saturday, Sunday, or 
Federal holiday. Intermediate Saturdays, Sundays, and Federal holidays 
are included in the computation of time. However, when the time period 
within which an act is to be performed is ten days or less, not 
including any additional time allowed for in paragraph (c) of this 
section, intermediate Saturdays, Sundays, and Federal holidays are not 
included.
    (b) When papers are deemed to be filed or served. (1) Filing and 
service are deemed to be effective:
    (i) In the case of transmission by electronic mail or other 
electronic means, upon transmittal by the serving party;
    (ii) In the case of overnight delivery service or first class, 
registered, or

[[Page 89913]]

certified mail, upon deposit in or delivery to an appropriate point of 
collection; or
    (iii) In the case of personal service or same day courier delivery, 
upon actual service.
    (2) The effective filing and service dates specified in paragraph 
(b)(1) of this section may be modified by the Board or ALJ in the case 
of filing or by agreement of the parties in the case of service.
    (c) Calculation of time for service and filing of responsive 
papers. Whenever a time limit is measured by a prescribed period from 
the service of any notice or paper, the applicable time limits are 
calculated as follows:
    (1) If service is made by electronic mail or other electronic means 
or by same day courier delivery, add one calendar day to the prescribed 
period;
    (2) If service is made by overnight delivery service, add two 
calendar days to the prescribed period; or
    (3) If service is made by first class, registered, or certified 
mail, add three calendar days to the prescribed period.


Sec.  263.13  Change of time limits.

    Except as otherwise provided by law, the ALJ may, for good cause 
shown, extend the time limits prescribed by the Uniform Rules or by any 
notice or order issued in the proceedings. After the referral of the 
case to the Board pursuant to Sec.  263.38, the Board may grant 
extensions of the time limits for good cause shown. Extensions may be 
granted at the motion of a party after notice and opportunity to 
respond is afforded all non-moving parties or on the Board's or the 
ALJ's own motion.


Sec.  263.14  Witness fees and expenses.

    (a) In general. A witness, including an expert witness, who 
testifies at a deposition or hearing will be paid the same fees for 
attendance and mileage as are paid in the United States district courts 
in proceedings in which the United States is a party, except as 
provided in paragraph (b) and unless otherwise waived.
    (b) Exception for testimony by a party. In the case of testimony by 
a party, no witness fees or mileage need to be paid. The Board will not 
be required to pay any fees to, or expenses of, any witness not 
subpoenaed by the Board.
    (c) Timing of payment. Fees and mileage in accordance with this 
paragraph (c)must be paid in advance by the party requesting the 
subpoena, except that fees and mileage need not be tendered in advance 
where the Board is the party requesting the subpoena.


Sec.  263.15  Opportunity for informal settlement.

    Any respondent may, at any time in the proceeding, unilaterally 
submit to Enforcement Counsel written offers or proposals for 
settlement of a proceeding, without prejudice to the rights of any of 
the parties. Any such offer or proposal may only be made to Enforcement 
Counsel. Submission of a written settlement offer does not provide a 
basis for adjourning or otherwise delaying all or any portion of a 
proceeding under this part. No settlement offer or proposal, or any 
subsequent negotiation or resolution, is admissible as evidence in any 
proceeding.


Sec.  263.16  The Board's right to conduct examination.

    Nothing contained in this subpart limits in any manner the right of 
the Board to conduct any examination, inspection, or visitation of any 
institution or institution-affiliated party, or the right of the Board 
to conduct or continue any form of investigation authorized by law.


Sec.  263.17  Collateral attacks on adjudicatory proceeding.

    If an interlocutory appeal or collateral attack is brought in any 
court concerning all or any part of an adjudicatory proceeding, the 
challenged adjudicatory proceeding will continue without regard to the 
pendency of that court proceeding. No default or other failure to act 
as directed in the adjudicatory proceeding within the times prescribed 
in this subpart will be excused based on the pendency before any court 
of any interlocutory appeal or collateral attack.


Sec.  263.18  Commencement of proceeding and contents of notice.

    (a) Commencement of proceeding. (1)(i) Except for change-in-control 
proceedings under section 7(j)(4) of the FDIA, 12 U.S.C. 1817(j)(4), a 
proceeding governed by this subpart is commenced by issuance of a 
notice by the Board.
    (ii) The notice must be served by Enforcement Counsel upon the 
respondent and given to any other appropriate financial institution 
supervisory authority where required by law. Enforcement Counsel may 
serve the notice upon counsel for the respondent, provided that 
Enforcement Counsel has confirmed that counsel represents the 
respondent in the matter and will accept service of the notice on 
behalf of the respondent.
    (iii) Enforcement Counsel must file the notice with OFIA.
    (2) Change-in control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the 
Board.
    (b) Contents of notice. Notice pleading applies. The notice must 
provide:
    (1) The legal authority for the proceeding and for the Board's 
jurisdiction over the proceeding;
    (2) Matters of fact or law showing that the Board is entitled to 
relief;
    (3) A proposed order or prayer for an order granting the requested 
relief;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as required by law or 
regulation;
    (6) The time within which to request a hearing as required by law 
or regulation; and
    (7) That the answer and/or request for a hearing must be filed with 
OFIA.


Sec.  263.19  Answer.

    (a) When. Within 20 days of service of the notice, respondent must 
file an answer as designated in the notice. In a civil money penalty 
proceeding, respondent must also file a request for a hearing within 20 
days of service of the notice.
    (b) Content of answer. An answer must specifically respond to each 
paragraph or allegation of fact contained in the notice and must admit, 
deny, or state that the respondent lacks sufficient information to 
admit or deny each allegation of fact. A statement of lack of 
information has the effect of a denial. Denials must fairly meet the 
substance of each allegation of fact denied; general denials are not 
permitted. When a respondent denies part of an allegation, that part 
must be denied and the remainder specifically admitted. Any allegation 
of fact in the notice which is not denied in the answer is deemed 
admitted for purposes of the proceeding. A respondent is not required 
to respond to the portion of a notice that constitutes the prayer for 
relief, or proposed order. The answer must set forth affirmative 
defenses, if any, asserted by the respondent.
    (c) Default--(1) Effect of failure to answer. Failure of a 
respondent to file an answer required by this section within the time 
provided constitutes a waiver of the respondent's right to appear and 
contest the allegations in the notice. If no timely answer is filed, 
Enforcement Counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the ALJ will file with the Board a recommended 
decision containing the findings and the relief sought in the notice. 
Any final order issued by the Board based upon a respondent's failure

[[Page 89914]]

to answer is deemed to be an order issued upon consent.
    (2) Effect of failure to request a hearing in civil money penalty 
proceedings. If respondent fails to request a hearing as required by 
law within the time provided, the notice of assessment constitutes a 
final and unappealable order of the Board without further action by the 
ALJ.


Sec.  263.20  Amended pleadings.

    (a) Amendments. The notice or answer may be amended or supplemented 
at any stage of the proceeding. The respondent must answer an amended 
notice within the time remaining for the respondent's answer to the 
original notice, or within ten days after service of the amended 
notice, whichever period is longer, unless the Board or ALJ orders 
otherwise for good cause.
    (b) Amendments to conform to the evidence. When issues not raised 
in the notice or answer are tried at the hearing by express or implied 
consent of the parties, they will be treated in all respects as if they 
had been raised in the notice or answer, and no formal amendments are 
required. If evidence is objected to at the hearing on the ground that 
it is not within the issues raised by the notice or answer, the ALJ may 
admit the evidence when admission is likely to assist in adjudicating 
the merits of the action and the objecting party fails to satisfy the 
ALJ that the admission of such evidence would unfairly prejudice that 
party's action or defense upon the merits. The ALJ may grant a 
continuance to enable the objecting party to meet such evidence.


Sec.  263.21  Failure to appear.

    Failure of a respondent to appear in person at the hearing or by a 
duly authorized counsel constitutes a waiver of respondent's right to a 
hearing and is deemed an admission of the facts as alleged and consent 
to the relief sought in the notice. Without further proceedings or 
notice to the respondent, the ALJ will file with the Board a 
recommended decision containing the findings and the relief sought in 
the notice.


Sec.  263.22  Consolidation and severance of actions.

    (a) Consolidation. (1) On the motion of any party, or on the ALJ's 
own motion, the ALJ may consolidate, for some or all purposes, any two 
or more proceedings, if each such proceeding involves or arises out of 
the same transaction, occurrence, or series of transactions or 
occurrences, or involves at least one common respondent or a material 
common question of law or fact, unless such consolidation would cause 
unreasonable delay or injustice.
    (2) In the event of consolidation under paragraph (a)(1) of this 
section, appropriate adjustment to the prehearing schedule must be made 
to avoid unnecessary expense, inconvenience, or delay.
    (b) Severance. The ALJ may, upon the motion of any party, sever the 
proceeding for separate resolution of the matter as to any respondent 
only if the ALJ finds:
    (1) Undue prejudice or injustice to the moving party would result 
from not severing the proceeding; and
    (2) Such undue prejudice or injustice would outweigh the interests 
of judicial economy and expedition in the complete and final resolution 
of the proceeding.


Sec.  263.23  Motions.

    (a) In writing. (1) Except as otherwise provided in this section, 
an application or request for an order or ruling must be made by 
written motion.
    (2) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.
    (3) No oral argument may be held on written motions except as 
otherwise directed by the ALJ. Written memoranda, briefs, affidavits, 
or other relevant material or documents may be filed in support of or 
in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the ALJ directs that such motion be reduced to writing.
    (c) Filing of motions. Motions must be filed with the ALJ, except 
that following the filing of the recommended decision, motions must be 
filed with the Board.
    (d) Responses. (1) Except as otherwise provided in this section, 
within ten days after service of any written motion, or within such 
other period of time as may be established by the ALJ or the Board, any 
party may file a written response to a motion. The ALJ will not rule on 
any oral or written motion before each party has had an opportunity to 
file a response.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed a consent by that party to the 
entry of an order substantially in the form of the order accompanying 
the motion.
    (e) Dilatory motions. Frivolous, dilatory or repetitive motions are 
prohibited. The filing of such motions may form the basis for 
sanctions.
    (f) Dispositive motions. Dispositive motions are governed by 
Sec. Sec.  263.29 and 263.30.


Sec.  263.24  Scope of document discovery.

    (a) Limits on discovery. (1) Subject to the limitations set out in 
paragraphs (b) through (d) of this section, a party to a proceeding 
under this subpart may obtain document discovery by serving a written 
request to produce documents. For purposes of a request to produce 
documents, the term documents includes writings, drawings, graphs, 
charts, photographs, recordings, electronically stored information, and 
other data or data compilations stored in any medium from which 
information can be obtained either directly or, if necessary, after 
translation by the responding party, into a reasonably usable form.
    (2) Discovery by use of deposition is governed by Sec.  263.53.
    (3) Discovery by use of either interrogatories or requests for 
admission is not permitted.
    (4) Any request to produce documents that calls for irrelevant 
material; or that is unreasonable, oppressive, excessive in scope, 
unduly burdensome, or repetitive of previous requests, or that seeks to 
obtain privileged documents will be denied or modified. A request is 
unreasonable, oppressive, excessive in scope, or unduly burdensome if, 
among other things, it fails to include justifiable limitations on the 
time period covered and the geographic locations to be searched, or the 
time provided to respond in the request is inadequate.
    (b) Relevance. A party may obtain document discovery regarding any 
non-privileged matter that has material relevance to the merits of the 
pending action.
    (c) Privileged matter. Privileged documents are not discoverable. 
Privileges include the attorney-client privilege, attorney work-product 
doctrine, bank examination privilege, law enforcement privilege, any 
government's or government agency's deliberative process privilege, and 
any other privileges the Constitution, any applicable act of Congress, 
or the principles of common law provide.
    (d) Time limits. All document discovery, including all responses to 
discovery requests, must be completed by the date set by the ALJ and no 
later than 30 days prior to the date scheduled for the commencement of 
the hearing, except as provided in the Local Rules. No exceptions to 
this time limit are permitted, unless the ALJ finds on the record that 
good cause exists for waiving the requirements of this paragraph (d).

[[Page 89915]]

Sec.  263.25  Request for document discovery from parties.

    (a) Document requests. (1) Any party may serve on any other party a 
request to produce and permit the requesting party or its 
representative to inspect or copy any discoverable documents that are 
in the possession, custody, or control of the party upon whom the 
request is served. In the case of a request for inspection, the 
responding party may produce copies of documents or of electronically 
stored information instead of permitting inspection.
    (2) The request:
    (i) Must describe with reasonable particularity each item or 
category of items to be inspected or produced; and
    (ii) Must specify a reasonable time, place, and manner for the 
inspection or production.
    (b) Production or copying--(1) General. Unless otherwise specified 
by the ALJ or agreed upon by the parties, the producing party must 
produce copies of documents as they are kept in the usual course of 
business or organized to correspond to the categories of the request, 
and electronically stored information must be produced in a form in 
which it is ordinarily maintained or in a reasonably usable form.
    (2) Costs. The producing party must pay its own costs to respond to 
a discovery request, unless otherwise agreed by the parties.
    (c) Obligation to update responses. A party who has responded to a 
discovery request with a response that was complete when made is not 
required to supplement the response to include documents thereafter 
acquired, unless the responding party learns:
    (1) The response was materially incorrect when made; or
    (2) The response, though correct when made, is no longer true and a 
failure to amend the response is, in substance, a knowing concealment.
    (d) Motions to limit discovery. (1) Any party that objects to a 
discovery request may, within 20 days of being served with such 
request, file a motion in accordance with the provisions of Sec.  
263.23 to strike or otherwise limit the request. If an objection is 
made to only a portion of an item or category in a request, the portion 
objected to must be specified. Any objections not made in accordance 
with this paragraph and Sec.  263.23 are waived.
    (2) The party who served the request that is the subject of a 
motion to strike or limit may file a written response within ten days 
of service of the motion. No other party may file a response.
    (e) Privilege. At the time other documents are produced, the 
producing party must reasonably identify all documents withheld on the 
grounds of privilege and must produce a statement of the basis for the 
assertion of privilege. When similar documents that are protected by 
attorney-client privilege, attorney work-product doctrine, bank 
examination privilege, law enforcement privilege, any government's or 
government agency's deliberative process privilege, or any other 
privileges of the Constitution, any applicable act of Congress, or the 
principles of common law, or are voluminous, these documents may be 
identified by category instead of by individual document. The ALJ 
retains discretion to determine when the identification by category is 
insufficient.
    (f) Motions to compel production. (1) If a party withholds any 
documents as privileged or fails to comply fully with a discovery 
request, the requesting party may, within ten days of the assertion of 
privilege or of the time the failure to comply becomes known to the 
requesting party, file a motion in accordance with the provisions of 
Sec.  263.23 for the issuance of a subpoena compelling production.
    (2) The party who asserted the privilege or failed to comply with 
the document request may file a written response to a motion to compel 
within ten days of service of the motion. No other party may file a 
response.
    (g) Ruling on motions. After the time for filing responses pursuant 
to this section has expired, the ALJ will rule promptly on all motions 
filed pursuant to this section. If the ALJ determines that a discovery 
request, or any of its terms, calls for irrelevant material, is 
unreasonable, oppressive, excessive in scope, unduly burdensome, or 
repetitive of previous requests, or seeks to obtain privileged 
documents, the ALJ may deny or modify the request, and may issue 
appropriate protective orders, upon such conditions as justice may 
require. The pendency of a motion to strike or limit discovery or to 
compel production is not a basis for staying or continuing the 
proceeding, unless otherwise ordered by the ALJ. Notwithstanding any 
other provision in this part, the ALJ may not release, or order a party 
to produce, documents withheld on grounds of privilege if the party has 
stated to the ALJ its intention to file a timely motion for 
interlocutory review of the ALJ's order to produce the documents, and 
until the motion for interlocutory review has been decided.
    (h) Enforcing discovery subpoenas. If the ALJ issues a subpoena 
compelling production of documents by a party, the subpoenaing party 
may, in the event of noncompliance and to the extent authorized by 
applicable law, apply to any appropriate United States district court 
for an order requiring compliance with the subpoena. A party's right to 
seek court enforcement of a subpoena will not in any manner limit the 
sanctions that may be imposed by the ALJ against a party who fails to 
produce subpoenaed documents.


Sec.  263.26  Document subpoenas to nonparties.

    (a) General rules. (1) Any party may apply to the ALJ for the 
issuance of a document discovery subpoena addressed to any person who 
is not a party to the proceeding. The application must contain a 
proposed document subpoena and a brief statement showing the general 
relevance and reasonableness of the scope of documents sought. The 
subpoenaing party must specify a reasonable time, place, and manner for 
making production in response to the document subpoena.
    (2) A party may apply for a document subpoena under this section 
only within the time period during which such party could serve a 
discovery request under Sec.  263.24(d). The party obtaining the 
document subpoena is responsible for serving it on the subpoenaed 
person and for serving copies on all parties. Document subpoenas may be 
served in any state, territory, or possession of the United States, the 
District of Columbia, or as otherwise provided by law.
    (3) The ALJ will promptly issue any document subpoena requested 
pursuant to this section. If the ALJ determines that the application 
does not set forth a valid basis for the issuance of the subpoena, or 
that any of its terms are unreasonable, oppressive, excessive in scope, 
or unduly burdensome, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon such conditions as may be consistent 
with the Uniform Rules.
    (b) Motion to quash or modify. (1) Any person to whom a document 
subpoena is directed may file a motion to quash or modify such subpoena 
with the ALJ. The motion must be accompanied by a statement of the 
basis for quashing or modifying the subpoena. The movant must serve the 
motion on all parties, and any party may respond to such motion within 
ten days of service of the motion.
    (2) Any motion to quash or modify a document subpoena must be filed 
on the same basis, including the assertion of privilege, upon which a 
party could object to a discovery request under Sec.  263.25(d), and 
during the same time limits during which such an objection could be 
filed.

[[Page 89916]]

    (c) Enforcing document subpoenas. If a subpoenaed person fails to 
comply with any subpoena issued pursuant to this section or any order 
of the ALJ, which directs compliance with all or any portion of a 
document subpoena, the subpoenaing party or any other aggrieved party 
may, to the extent authorized by applicable law, apply to an 
appropriate United States district court for an order requiring 
compliance with so much of the document subpoena as the ALJ has not 
quashed or modified. A party's right to seek court enforcement of a 
document subpoena will in no way limit the sanctions that may be 
imposed by the ALJ on a party who induces a failure to comply with 
subpoenas issued under this section.


Sec.  263.27  Deposition of witness unavailable for hearing.

    (a) General rules. (1) If a witness will not be available for the 
hearing, a party desiring to preserve that witness' testimony for the 
record may apply in accordance with the procedures set forth in 
paragraph (a)(2) of this section, to the ALJ for the issuance of a 
subpoena, including a subpoena duces tecum, requiring the attendance of 
the witness at a deposition. The ALJ may issue a deposition subpoena 
under this section upon showing:
    (i) The witness will be unable to attend or may be prevented from 
attending the hearing because of age, sickness or infirmity, or will 
otherwise be unavailable;
    (ii) The witness' unavailability was not procured or caused by the 
subpoenaing party;
    (iii) The testimony is reasonably expected to be material; and
    (iv) Taking the deposition will not result in any undue burden to 
any other party and will not cause undue delay of the proceeding.
    (2) The application must contain a proposed deposition subpoena and 
a brief statement of the reasons for the issuance of the subpoena. The 
subpoena must name the witness whose deposition is to be taken and 
specify the time, manner, and place for taking the deposition. A 
deposition subpoena may require the witness to be deposed at any place 
within the country in which that witness resides or has a regular place 
of employment, by remote means, or such other convenient place or 
manner, as the ALJ fixes.
    (3) Any requested subpoena that sets forth a valid basis for its 
issuance must be promptly issued, unless the ALJ requires a written 
response or requires attendance at a conference concerning whether the 
requested subpoena should be issued.
    (4) The party obtaining a deposition subpoena is responsible for 
serving it on the witness and for serving copies on all parties. Unless 
the ALJ orders otherwise, no deposition under this section may be taken 
on fewer than ten days' notice to the witness and all parties.
    (b) Objections to deposition subpoenas. (1) The witness and any 
party who has not had an opportunity to oppose a deposition subpoena 
issued under this section may file a motion with the ALJ to quash or 
modify the subpoena prior to the time for compliance specified in the 
subpoena, but not more than ten days after service of the subpoena.
    (2) A statement of the basis for the motion to quash or modify a 
subpoena issued under this section must accompany the motion. The 
motion must be served on all parties.
    (c) Procedure upon deposition. (1) Each witness testifying pursuant 
to a deposition subpoena must be duly sworn. By stipulation of the 
parties or by order of the ALJ, a court reporter or other person 
authorized to administer an oath may administer the oath remotely 
without being in the physical presence of the deponent. Each party must 
have the right to examine the witness. Objections to questions or 
documents must be in short form, stating the grounds for the objection. 
Failure to object to questions or documents is not deemed a waiver 
except where the ground for the objection might have been avoided if 
the objection had been timely presented. All questions, answers, and 
objections must be recorded.
    (2) Any party may move before the ALJ for an order compelling the 
witness to answer any questions the witness has refused to answer or 
submit any evidence the witness has refused to submit during the 
deposition.
    (3) The deposition must be subscribed by the witness, unless the 
parties and the witness, by stipulation, have waived the signing, or 
the witness is ill, cannot be found, or has refused to sign. If the 
deposition is not subscribed by the witness, the court reporter taking 
the deposition must certify that the transcript is a true and complete 
transcript of the deposition.
    (d) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section, or fails to comply 
with any order of the ALJ, which directs compliance with all or any 
portion of a deposition subpoena under paragraph (b) or (c)(2) of this 
section, the subpoenaing party or other aggrieved party may, to the 
extent authorized by applicable law, apply to an appropriate United 
States district court for an order requiring compliance with the 
portions of the subpoena with which the subpoenaed party has not 
complied. A party's right to seek court enforcement of a deposition 
subpoena in no way limits the sanctions that may be imposed by the ALJ 
on a party who fails to comply with, or procures a failure to comply 
with, a subpoena issued under this section.


Sec.  263.28  Interlocutory review.

    (a) General rule. The Board may review a ruling of the ALJ prior to 
the certification of the record to the Board only in accordance with 
the procedures set forth in this section and Sec.  263.23.
    (b) Scope of review. The Board may exercise interlocutory review of 
a ruling of the ALJ if the Board finds:
    (1) The ruling involves a controlling question of law or policy as 
to which substantial grounds exist for a difference of opinion;
    (2) Immediate review of the ruling may materially advance the 
ultimate termination of the proceeding;
    (3) Subsequent modification of the ruling at the conclusion of the 
proceeding would be an inadequate remedy; or
    (4) Subsequent modification of the ruling would cause unusual delay 
or expense.
    (c) Procedure. Any request for interlocutory review must be filed 
by a party with the ALJ within ten days of the ruling and must 
otherwise comply with Sec.  263.23. Any party may file a response to a 
request for interlocutory review in accordance with Sec.  263.23(d). 
Upon the expiration of the time for filing all responses, the ALJ will 
refer the matter to the Board for final disposition.
    (d) Suspension of proceeding. Neither a request for interlocutory 
review nor any disposition of such a request by the Board under this 
section suspends or stays the proceeding unless otherwise ordered by 
the ALJ or the Board.


Sec.  263.29  Summary disposition.

    (a) In general. The ALJ will recommend that the Board issue a final 
order granting a motion for summary disposition if the undisputed 
pleaded facts, admissions, affidavits, stipulations, documentary 
evidence, matters as to which official notice may be taken, and any 
other evidentiary materials properly submitted in connection with a 
motion for summary disposition show:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.

[[Page 89917]]

    (b) Filing of motions and responses. (1) Any party who believes 
there is no genuine issue of material fact to be determined and that 
the party is entitled to a decision as a matter of law may move at any 
time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 days after service of such a motion, 
or within such time period as allowed by the ALJ, may file a response 
to such motion.
    (2) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, investigatory depositions, transcripts, 
affidavits, and any other evidentiary materials that the moving party 
contends supports the moving party's position. The motion must also be 
accompanied by a brief containing the points and authorities in support 
of the contention of the moving party. Any party opposing a motion for 
summary disposition must file a statement setting forth those material 
facts as to which the opposing party contends a genuine dispute exists. 
Such opposition must be supported by evidence of the same type as that 
submitted with the motion for summary disposition and a brief 
containing the points and authorities in support of the contention that 
summary disposition would be inappropriate.
    (c) Hearing on motion. At the written request of any party or on 
the ALJ's own motion, the ALJ may hear oral argument on the motion for 
summary disposition.
    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the ALJ will determine whether 
the moving party is entitled to summary disposition. If the ALJ 
determines that summary disposition is warranted, the ALJ will submit a 
recommended decision to that effect to the Board. If the ALJ finds that 
no party is entitled to summary disposition, the ALJ will make a ruling 
denying the motion.


Sec.  263.30  Partial summary disposition.

    If the ALJ determines that a party is entitled to summary 
disposition as to certain claims only, the ALJ will defer submitting a 
recommended decision as to those claims. A hearing on the remaining 
issues must be ordered. Those claims for which the ALJ has determined 
that summary disposition is warranted will be addressed in the 
recommended decision filed at the conclusion of the hearing.


Sec.  263.31  Scheduling and prehearing conferences.

    (a) Scheduling conference. Within 30 days of service of the notice 
or order commencing a proceeding, the ALJ will direct counsel for all 
parties to meet with the ALJ at a specified time and manner prior to 
the hearing for the purpose of scheduling the course and conduct of the 
proceeding. This meeting is called a ``scheduling conference.'' The 
schedule for the identification of potential witnesses, the time for 
and manner of discovery, and the exchange of any prehearing materials 
including witness lists, statements of issues, stipulations, exhibits, 
and any other materials may also be determined at the scheduling 
conference.
    (b) Prehearing conferences. The ALJ may, in addition to the 
scheduling conference, on the ALJ's own motion or at the request of any 
party, direct counsel for the parties to confer with the ALJ at a 
prehearing conference to address any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, 
authenticity and admissibility into evidence of documents;
    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes;
    (7) Amendments to pleadings; and
    (8) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (c) Transcript. The ALJ may require that a scheduling or prehearing 
conference be recorded by a court reporter. A transcript of the 
conference and any materials filed, including orders, becomes part of 
the record of the proceeding. A party may obtain a copy of the 
transcript at the party's expense.
    (d) Scheduling or prehearing orders. At or within a reasonable time 
following the conclusion of the scheduling conference or any prehearing 
conference, the ALJ will serve on each party an order setting forth any 
agreements reached and any procedural determinations made.


Sec.  263.32  Prehearing submissions.

    (a) Party prehearing submissions. Within the time set by the ALJ, 
but in no case later than 20 days before the start of the hearing, each 
party must file with the ALJ and serve on every other party:
    (1) A prehearing statement that states:
    (i) The party's position with respect to the legal issues 
presented;
    (ii) The statutory and case law upon which the party relies; and
    (iii) The facts that the party expects to prove at the hearing;
    (2) A final list of witnesses to be called to testify at the 
hearing, including the name, mailing address, and electronic mail 
address of each witness and a short summary of the expected testimony 
of each witness, which need not identify the exhibits to be relied upon 
by each witness at the hearing;
    (3) A list of the exhibits expected to be introduced at the hearing 
along with a copy of each exhibit; and
    (4) Stipulations of fact, if any.
    (b) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraph (a) of 
this section, except for good cause shown.


Sec.  263.33  Public hearings.

    (a) General rule. All hearings must be open to the public, unless 
the Board, in the Board's discretion, determines that holding an open 
hearing would be contrary to the public interest. Within 20 days of 
service of the notice or, in the case of change-in-control proceedings 
under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), within 20 
days from service of the hearing order, any respondent may file with 
the Board a request for a private hearing, and any party may file a 
reply to such a request. A party must serve on the ALJ a copy of any 
request or reply the party files with the Board. The form of, and 
procedure for, these requests and replies are governed by Sec.  263.23. 
A party's failure to file a request or a reply constitutes a waiver of 
any objections regarding whether the hearing will be public or private.
    (b) Filing document under seal. Enforcement Counsel, in Enforcement 
Counsel's discretion, may file any document or part of a document under 
seal if disclosure of the document would be contrary to the public 
interest. The ALJ will take all appropriate steps to preserve the 
confidentiality of such documents or parts thereof, including closing 
portions of the hearing to the public.


Sec.  263.34  Hearing subpoenas.

    (a) Issuance. (1) Upon application of a party showing general 
relevance and reasonableness of scope of the testimony or other 
evidence sought, the ALJ may issue a subpoena or a subpoena duces tecum 
requiring the attendance of a witness at the hearing or the production

[[Page 89918]]

of documentary or physical evidence at the hearing. The application for 
a hearing subpoena must also contain a proposed subpoena specifying the 
attendance of a witness or the production of evidence from any state, 
territory, or possession of the United States, the District of 
Columbia, or as otherwise provided by law at any designated place where 
the hearing is being conducted. The party making the application must 
serve a copy of the application and the proposed subpoena on every 
other party.
    (2) A party may apply for a hearing subpoena at any time before the 
commencement of a hearing. During a hearing, a party may make an 
application for a subpoena orally on the record before the ALJ.
    (3) The ALJ will promptly issue any hearing subpoena requested 
pursuant to this section. If the ALJ determines that the application 
does not set forth a valid basis for the issuance of the subpoena, or 
that any of its terms are unreasonable, oppressive, excessive in scope, 
or unduly burdensome, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon any conditions consistent with this 
subpart. Upon issuance by the ALJ, the party making the application 
must serve the subpoena on the person named in the subpoena and on each 
party.
    (b) Motion to quash or modify. (1) Any person to whom a hearing 
subpoena is directed or any party may file a motion to quash or modify 
the subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant must serve the motion on each party 
and on the person named in the subpoena. Any party may respond to the 
motion within ten days of service of the motion.
    (2) Any motion to quash or modify a hearing subpoena must be filed 
prior to the time specified in the subpoena for compliance but not more 
than ten days after the date of service of the subpoena upon the 
movant.
    (c) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section or any order of the 
ALJ which directs compliance with all or any portion of a document 
subpoena, the subpoenaing party or any other aggrieved party may seek 
enforcement of the subpoena pursuant to Sec.  263.26(c).


Sec.  263.35  Conduct of hearings.

    (a) General rules. (1) Conduct of hearings. Hearings must be 
conducted so as to provide a fair and expeditious presentation of the 
relevant disputed issues. Each party has the right to present its case 
or defense by oral and documentary evidence and to conduct such cross 
examination as may be required for full disclosure of the facts.
    (2) Order of hearing. Enforcement Counsel will present its case-in-
chief first, unless otherwise ordered by the ALJ, or unless otherwise 
expressly specified by law or regulation. Enforcement Counsel will be 
the first party to present an opening statement and a closing statement 
and may make a rebuttal statement after the respondent's closing 
statement. If there are multiple respondents, respondents may agree 
among themselves as to their order of presentation of their cases, but 
if they do not agree, the ALJ will fix the order.
    (3) Examination of witnesses. Only one counsel for each party may 
conduct an examination of a witness, except that in the case of 
extensive direct examination, the ALJ may permit more than one counsel 
for the party presenting the witness to conduct the examination. A 
party may have one counsel conduct the direct examination and another 
counsel conduct re-direct examination of a witness, or may have one 
counsel conduct the cross examination of a witness and another counsel 
conduct the re-cross examination of a witness.
    (4) Stipulations. Unless the ALJ directs otherwise, all 
stipulations of fact and law previously agreed upon by the parties, and 
all documents, the admissibility of which have been previously 
stipulated, will be admitted into evidence upon commencement of the 
hearing.
    (b) Transcript. The hearing must be recorded and transcribed. The 
reporter will make the transcript available to any party upon payment 
by that party to the reporter of the cost of the transcript. The ALJ 
may order the record corrected, either upon motion to correct, upon 
stipulation of the parties, or following notice to the parties upon the 
ALJ's own motion.
    (c) Electronic presentation. Based on the circumstances of each 
hearing, the ALJ may direct the use of, or any party may use, an 
electronic presentation during the hearing. If the ALJ requires an 
electronic presentation during the hearing, each party will be 
responsible for their own presentation and related costs, unless the 
parties agree to another manner in which to allocate presentation 
responsibilities and costs.


Sec.  263.36  Evidence.

    (a) Admissibility. (1) Except as is otherwise set forth in this 
section, relevant, material, and reliable evidence that is not unduly 
repetitive is admissible to the fullest extent authorized by the 
Administrative Procedure Act and other applicable law.
    (2) Evidence that would be admissible under the Federal Rules of 
Evidence is admissible in a proceeding conducted pursuant to this 
subpart.
    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence may not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant, 
material, reliable, and not unduly repetitive.
    (b) Official notice. (1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court and any material information in the official public 
records of any Federal or State government agency.
    (2) All matters officially noticed by the ALJ or the Board must 
appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, must be afforded an opportunity to 
object.
    (c) Documents. (1) A duplicate copy of a document is admissible to 
the same extent as the original, unless a genuine issue is raised as to 
whether the copy is in some material respect not a true and legible 
copy of the original.
    (2) Subject to the requirements of paragraph (a) of this section, 
any document, including a report of examination, supervisory activity, 
inspection, or visitation, prepared by an appropriate Federal financial 
institutions regulatory agency or by a State regulatory agency, is 
admissible either with or without a sponsoring witness.
    (3) Witnesses may use existing or newly created charts, exhibits, 
calendars, calculations, outlines, or other graphic material to 
summarize, illustrate, or simplify the presentation of testimony. Such 
materials may, subject to the ALJ's discretion, be used with or without 
being admitted into evidence.
    (d) Objections. (1) Objections to the admissibility of evidence 
must be timely made and rulings on all objections must appear on the 
record.
    (2) When an objection to a question or line of questioning 
propounded to a witness is sustained, the examining counsel may make a 
specific proffer on the record of what the examining counsel expected 
to prove by the expected testimony of the witness either by 
representation of counsel or by direct questioning of the witness.
    (3) The ALJ will retain rejected exhibits, adequately marked for 
identification, for the record, and transmit such exhibits to the 
Board.

[[Page 89919]]

    (4) Failure to object to admission of evidence or to any ruling 
constitutes a waiver of the objection.
    (e) Stipulations. The parties may stipulate as to any relevant 
matters of fact or the authentication of any relevant documents. Such 
stipulations must be received in evidence at a hearing and are binding 
on the parties with respect to the matters therein stipulated.
    (f) Depositions of unavailable witnesses. (1) If a witness is 
unavailable to testify at a hearing, and that witness has testified in 
a deposition to which all parties in a proceeding had notice and an 
opportunity to participate, a party may offer as evidence all or any 
part of the transcript of the deposition, including deposition 
exhibits, if any.
    (2) Such deposition transcript is admissible to the same extent 
that testimony would have been admissible had that person testified at 
the hearing, provided that if a witness refused to answer proper 
questions during the depositions, the ALJ may, on that basis, limit the 
admissibility of the deposition in any manner that justice requires.
    (3) Only those portions of a deposition received in evidence at the 
hearing constitute a part of the record.


Sec.  263.37  Post-hearing filings.

    (a) Proposed findings and conclusions and supporting briefs. (1) 
Using the same method of service for each party, the ALJ will serve 
notice upon each party that the certified transcript, together with all 
hearing exhibits and exhibits introduced but not admitted into evidence 
at the hearing, has been filed. Any party may file with the ALJ 
proposed findings of fact, proposed conclusions of law, and a proposed 
order within 30 days following service of this notice by the ALJ or 
within such longer period as may be ordered by the ALJ.
    (2) Proposed findings and conclusions must be supported by citation 
to any relevant authorities and by page references to any relevant 
portions of the record. A post-hearing brief may be filed in support of 
proposed findings and conclusions, either as part of the same document 
or in a separate document. Any party who fails to file timely with the 
ALJ any proposed finding or conclusion is deemed to have waived the 
right to raise in any subsequent filing or submission any issue not 
addressed in such party's proposed finding or conclusion.
    (b) Reply briefs. Reply briefs may be filed within 15 days after 
the date on which the parties' proposed findings, conclusions, and 
order are due. Reply briefs must be strictly limited to responding to 
new matters, issues, or arguments raised in another party's papers. A 
party who has not filed proposed findings of fact and conclusions of 
law or a post-hearing brief may not file a reply brief.
    (c) Simultaneous filing required. The ALJ will not order the filing 
by any party of any brief or reply brief in advance of the other 
party's filing of its brief.


Sec.  263.38  Recommended decision and filing of record.

    (a) Filing of recommended decision and record. Within 45 days after 
expiration of the time allowed for filing reply briefs under Sec.  
263.37(b), the ALJ will file with and certify to the Board, for 
decision, the record of the proceeding. The record must include the 
ALJ's recommended decision, recommended findings of fact, recommended 
conclusions of law, and proposed order; all prehearing and hearing 
transcripts, exhibits, and rulings; and the motions, briefs, memoranda, 
and other supporting papers filed in connection with the hearing. The 
ALJ will serve upon each party the recommended decision, findings, 
conclusions, and proposed order.
    (b) Filing of index. At the same time the ALJ files with and 
certifies to the Board for final determination the record of the 
proceeding, the ALJ will furnish to the Board a certified index of the 
entire record of the proceeding. The certified index must include, at a 
minimum, an entry for each paper, document, or motion filed with the 
ALJ in the proceeding, the date of the filing, and the identity of the 
filer. The certified index must also include an exhibit index 
containing, at a minimum, an entry consisting of exhibit number and 
title or description for: each exhibit introduced and admitted into 
evidence at the hearing; each exhibit introduced but not admitted into 
evidence at the hearing; each exhibit introduced and admitted into 
evidence after the completion of the hearing; and each exhibit 
introduced but not admitted into evidence after the completion of the 
hearing.


Sec.  263.39  Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  263.38, a party may file with the Board written exceptions to the 
ALJ's recommended decision, findings, conclusions, or proposed order, 
to the admission or exclusion of evidence, or to the failure of the ALJ 
to make a ruling proposed by a party. A supporting brief may be filed 
at the time the exceptions are filed, either as part of the same 
document or in a separate document.
    (b) Effect of failure to file or raise exceptions. (1) Failure of a 
party to file exceptions to those matters specified in paragraph (a) of 
this section within the time prescribed is deemed a waiver of objection 
thereto.
    (2) No exception need be considered by the Board if the party 
taking exception had an opportunity to raise the same objection, issue, 
or argument before the ALJ and failed to do so.
    (c) Contents. (1) All exceptions and briefs in support of such 
exceptions must be confined to the particular matters in, or omissions 
from, the ALJ's recommendations to which that party takes exception.
    (2) All exceptions and briefs in support of exceptions must set 
forth page or paragraph references to the specific parts of the ALJ's 
recommendations to which exception is taken, the page or paragraph 
references to those portions of the record relied upon to support each 
exception, and the legal authority relied upon to support each 
exception.


Sec.  263.40  Review by the Board.

    (a) Notice of submission to the Board. When the Board determines 
that the record in the proceeding is complete, the Board will serve 
notice upon the parties that the proceeding has been submitted to the 
Board for final decision.
    (b) Oral argument before the Board. Upon the initiative of the 
Board or on the written request of any party filed with the Board 
within the time for filing exceptions, the Board may order and hear 
oral argument on the recommended findings, conclusions, decision, and 
order of the ALJ. A written request by a party must show good cause for 
oral argument and state reasons why arguments cannot be presented 
adequately in writing. A denial of a request for oral argument may be 
set forth in the Board's final decision. Oral argument before the Board 
must be on the record.
    (c) Board's final decision. (1) Decisional employees may advise and 
assist the Board in the consideration and disposition of the case. The 
final decision of the Board will be based upon review of the entire 
record of the proceeding, except that the Board may limit the issues to 
be reviewed to those findings and conclusions to which opposing 
arguments or exceptions have been filed by the parties.
    (2) The Board will render a final decision within 90 days after

[[Page 89920]]

notification of the parties that the case has been submitted for final 
decision, or 90 days after oral argument, whichever is later, unless 
the Board orders that the action or any aspect thereof be remanded to 
the ALJ for further proceedings. Copies of the final decision and order 
of the Board will be served upon each party to the proceeding, upon 
other persons required by statute, and, if directed by the Board or 
required by statute, upon any appropriate State or Federal supervisory 
authority.


Sec.  263.41  Stays pending judicial review.

    The commencement of proceedings for judicial review of a final 
decision and order of the Board may not, unless specifically ordered by 
the Board or a reviewing court, operate as a stay of any order issued 
by the Board. The Board may, in the Board's, and on such terms as the 
Board finds just, stay the effectiveness of all or any part of an order 
pending a final decision on a petition for review of that order.

Subpart B--Board Local Rules Supplementing the Uniform Rules


Sec.  263.50  Purpose and scope.

    (a) This subpart prescribes the rules of practice and procedure 
governing formal adjudications set forth in paragraph (b) of this 
section, and supplements the rules of practice and procedure contained 
in subpart A of this part.
    (b) The rules and procedures of this subpart and subpart A of this 
part will apply to the formal adjudications set forth in Sec.  263.1 
and to the following adjudications:
    (1) Suspension of a member bank from use of credit facilities of 
the Federal Reserve System under section 4 of the FRA (12 U.S.C. 301);
    (2) Termination of a bank's membership in the Federal Reserve 
System under section 9 of the FRA (12 U.S.C. 327);
    (3) Issuance of a cease-and-desist order under section 11 of the 
Clayton Act (15 U.S.C. 21);
    (4) Adjudications under sections 2, 3, or 4 of the BHC Act (12 
U.S.C. 1841, 1842, or 1843);
    (5) Formal adjudications on bank merger applications under section 
18(c) of the FDIA (12 U.S.C. 1828(c));
    (6) Issuance of a divestiture order under section 5(e) of the BHC 
Act (12 U.S.C. 1844(e));
    (7) Imposition of sanctions upon any municipal securities dealer 
for which the Board is the appropriate regulatory agency, or upon any 
person associated or seeking to become associated with such a municipal 
securities dealer, under section 15B(c)(5) of the Exchange Act (15 
U.S.C. 78o-4);
    (8) Proceedings where the Board otherwise orders that a formal 
hearing be held;
    (9) Termination of the activities of a state branch, state agency, 
or commercial lending company subsidiary of a foreign bank in the 
United States, pursuant to section 7(e) of the IBA (12 U.S.C. 3105(d));
    (10) Termination of the activities of a representative office of a 
foreign bank in the United States, pursuant to section 10(b) of the IBA 
(12 U.S.C. 3107(b));
    (11) Issuance of a prompt corrective action directive to a member 
bank under section 38 of the FDI Act (12 U.S.C. 1831o);
    (12) Reclassification of a member bank on grounds of unsafe or 
unsound condition under section 38(g)(1) of the FDI Act (12 U.S.C. 
1831o(g)(1));
    (13) Reclassification of a member bank on grounds of unsafe and 
unsound practice under section 38(g)(1) of the FDI Act (12 U.S.C. 
1831o(g)(1));
    (14) Issuance of an order requiring a member bank to dismiss a 
director or senior executive officer under section 38 (e)(5) and 
38(f)(2) (F)(ii) of the FDI Act (12 U.S.C. 1831o(e)(5) and 1831o(f)(2) 
(F)(ii)); and
    (15) Adjudications under section 10 of the HOLA (12 U.S.C. 1467a).


Sec.  263.51  Definitions.

    As used in subparts B through G of this part:
    (a) Secretary means the Secretary of the Board of Governors of the 
Federal Reserve System.
    (b) Member bank means any bank that is a member of the Federal 
Reserve System.
    (c) Institution has the same meaning as that assigned to it in 
subpart A of this part, and includes any foreign bank with a 
representative office in the United States.


Sec.  263.52  Address for filing.

    All papers to be filed with the Board must be filed with the 
Secretary of the Board of Governors of the Federal Reserve System, 
Washington, DC 20551. All papers to be filed with the Board 
electronically must be sent to: <a href="/cdn-cgi/l/email-protection#16594553553b5a7f627f7177627f79785670647438717960"><span class="__cf_email__" data-cfemail="09465a4c4a2445607d606e687d606667496f7b6b276e667f">[email protected]</span></a>.


Sec.  263.53  Discovery depositions.

    (a) In general. In addition to the discovery permitted in subpart A 
of this part, limited discovery by means of depositions will be allowed 
for individuals with knowledge of facts material to the proceeding that 
are not protected from discovery by any applicable privilege, and of 
identified expert witnesses. Except in unusual cases, accordingly, 
depositions will be permitted only of individuals identified as hearing 
witnesses, including experts. All discovery depositions must be 
completed within the time set forth in Sec.  263.24(d).
    (b) Application. A party who desires to take a deposition of any 
other party's proposed witnesses, must apply to the ALJ for the 
issuance of a deposition subpoena or subpoena duces tecum. The 
application must state the name and address of the proposed deponent, 
the subject matter of the testimony expected from the deponent and its 
relevancy to the proceeding, and the address of the place, the manner 
(e.g., remote means, in person), and the time, no sooner than ten days 
after the service of the subpoena, for the taking of the deposition. 
Any such application must be treated as a motion subject to the rules 
governing motions practice set forth in Sec.  263.23.
    (c) Issuance of subpoena. The ALJ must issue the requested 
deposition subpoena or subpoena duces tecum upon a finding that the 
application satisfies the requirements of this section and of Sec.  
263.24. If the ALJ determines that the taking of the deposition or its 
proposed location or manner is, in whole or in part, unnecessary, 
unreasonable, oppressive, excessive in scope or unduly burdensome, the 
ALJ may deny the application or may grant it upon such conditions as 
justice may require. The party obtaining the deposition subpoena or 
subpoena duces tecum will be responsible for serving it on the deponent 
and all parties to the proceeding in accordance with Sec.  263.11. A 
deposition subpoena may require the witness to be deposed at any place 
within the country in which that witness resides or has a regular place 
of employment, by remote means, or such other convenient place or 
manner, as the ALJ fixes.
    (d) Motion to quash or modify. A person named in a deposition 
subpoena or subpoena duces tecum may file a motion to quash or modify 
the subpoena or for the issuance of a protective order. Such motions 
must be filed within ten days following service of the subpoena, but in 
all cases at least five days prior to the commencement of the scheduled 
deposition. The motion must be accompanied by a statement of the 
reasons for granting the motion and a copy of the motion and the 
statement must be served on the party which requested the subpoena. 
Only the party requesting the subpoena may file a response to a motion 
to quash or modify, and any such response must be

[[Page 89921]]

filed within five days following service of the motion.
    (e) Enforcement of a deposition subpoena. Enforcement of a 
deposition subpoena must be in accordance with the procedures set forth 
in Sec.  263.27(d).
    (f) Conduct of the deposition. The deponent must be duly sworn. By 
stipulation of the parties or order by the ALJ, a court reporter or 
other person authorized to administer an oath may administer the oath 
remotely, without being in the physical presence of the deponent. Each 
party may examine the deponent with respect to all non-privileged, 
relevant, and material matters. Objections to questions or evidence 
must be in the short form, stating the ground for the objection. 
Failure to object to questions or evidence will not be deemed a waiver 
except where the grounds for the objection might have been avoided if 
the objection had been timely presented. The discovery deposition must 
be transcribed or otherwise recorded as agreed among the parties.
    (g) Protective orders. At any time during the taking of a discovery 
deposition, on the motion of any party or of the deponent, the ALJ may 
terminate or limit the scope and manner of the deposition upon a 
finding that grounds exist for such relief. Grounds for terminating or 
limiting the taking of a discovery deposition include a finding that 
the discovery deposition is being conducted in bad faith or in such a 
manner as to:
    (1) Unreasonably annoy, embarrass, or oppress the deponent;
    (2) Unreasonably probe into privilege, irrelevant, or immaterial 
matters; or
    (3) Unreasonably attempt to pry into a party's preparation for 
trial.


Sec.  263.54  Delegation to the Office of Financial Institution 
Adjudication.

    Unless otherwise ordered by the Board, administrative adjudications 
subject to subpart A of this part must be conducted by an ALJ of OFIA.


Sec.  263.55  Board as Presiding Officer.

    The Board may, in its discretion, designate itself, one or more of 
its members, or an authorized officer, to act as presiding officer in a 
formal hearing. In such a proceeding, the authority of Board or its 
designee will include all the authority provided to an ALJ under this 
part. Proposed findings and conclusions, briefs, and other submissions 
by the parties permitted in subpart A of this part must be filed with 
the Secretary for consideration by the Board. Sections 263.38 and 
263.39 will not apply to proceedings conducted under this section.


Sec.  263.56  Initial licensing proceedings.

    Proceedings with respect to applications for initial licenses will 
include, but not be limited to, applications for Board approval under 
section 3 of the BHC Act and section 10 of HOLA and such proceedings as 
may be ordered by the Board with respect to applications under section 
18(c) of the FDIA. In such initial licensing proceedings, the 
procedures set forth in subpart A of this part will apply, except that 
the Board may designate a Board Counsel to represent the Board in a 
nonadversary capacity for the purpose of developing for the record 
information relevant to the issues to be determined by the Presiding 
Officer and the Board. In such proceedings, Board Counsel will be 
considered to be a decisional employee for purposes of Sec. Sec.  263.9 
and 263.40.


Sec.  263.57  Sanctions relating to conduct in an adjudicatory 
proceeding.

    (a) General rule. The ALJ may impose sanctions when any party or 
person in an adjudicatory proceeding under this part has failed to 
comply with an applicable statute, regulation, or order, and that 
failure to comply:
    (1) Constitutes contemptuous conduct;
    (2) Materially injures or prejudices another party in terms of 
substantive injury, incurring additional expenses including attorney's 
fees, prejudicial delay, or otherwise;
    (3) Is a clear and unexcused violation of an applicable statute, 
regulation, or order; or
    (4) Unduly delays the proceeding.
    (b) Sanctions. Sanctions which may be imposed include any one or 
more of the following:
    (1) Issuing an order against the party;
    (2) Rejecting or striking any testimony or documentary evidence 
offered, or other papers filed, by the party;
    (3) Precluding the party from:
    (i) Contesting specific issues or findings;
    (ii) Offering certain evidence or challenging or contesting certain 
evidence offered by another party; or
    (iii) Making a late filing or conditioning a late filing on any 
terms that are just;
    (4) Assessing reasonable expenses, including attorney's fees, 
incurred by any other party as a result of the improper action or 
failure to act; and
    (5) Excluding or suspending a party or person from the adjudicatory 
proceeding.
    (c) Procedure for imposition of sanctions. (1) Upon the motion of 
any party, or on the ALJ's own motion, the ALJ may impose sanctions in 
accordance with this section. The ALJ must submit to the Board for 
final ruling the sanction of entering a final order determining the 
case on the merits.
    (2) No sanction authorized by this section, other than refusal to 
accept late filings, must be imposed without prior notice to all 
parties and an opportunity for any party or person against whom 
sanctions would be imposed to be heard. Such opportunity to be heard 
may be on such notice, and the response may be in such form, as the ALJ 
directs. The ALJ may limit the opportunity to be heard to an 
opportunity of a party or person to respond orally immediately after 
the act or inaction covered by this section is noted by the ALJ.
    (3) Requests for the imposition of sanctions by any party, and the 
imposition of sanctions, are subject to interlocutory review in the 
same manner as any other ruling by the ALJ.
    (d) Section not exclusive. Nothing in this section precludes the 
ALJ or the Board from taking any other action, or imposing any 
restriction or sanction, authorized by applicable statute or 
regulation.

0
21. Subpart K is added to read as follows:
Subpart K--Formal Investigative Proceedings
Sec.
263.450 Scope.
263.451 Definitions.
263.452 Conduct of a formal investigative proceeding.
263.453 Powers of the designated representative.
263.454 Confidentiality of proceedings.
263.455 Transcripts.
263.456 Rights of witnesses.
263.457 Subpoenas.

Subpart K--Formal Investigative Proceedings


Sec.  263.450  Scope.

    (a) The procedures of this subpart must be followed when a formal 
investigation is instituted and conducted pursuant to: section 8(n) of 
the FDIA (12 U.S.C. 1818(n)); section 10(c) of the FDIA (12 U.S.C. 
1820(c)); section 7(j)(15) of the FDIA (12 U.S.C. 1817(j)(15)); section 
5(f) of the Bank Holding Company Act (12 U.S.C. 1844(f)); sections 
10(b)(4) and 10(g)(2) of HOLA (12 U.S.C. 1464(b)(4) and 1467a(g)(2)); 
or section 162 of the Dodd-Frank Act (12 U.S.C. 5362).
    (b) Nothing in this subpart prohibits the Board from conducting 
informal investigations or obtaining information by any means other 
than a subpoena issued pursuant to this subpart.
    (c) This subpart does not apply to adjudicatory proceedings as to 
which

[[Page 89922]]

hearings are required by statute, the rules for which are contained in 
part 262 of this chapter and subpart A of this part.


Sec.  263.451  Definitions.

    As used in this subpart:
    (a) Formal investigative proceeding means an investigation 
conducted pursuant to an order of investigation as provided in Sec.  
263.452(a).
    (b) Designated representative means the person or persons empowered 
by the Board or by the General Counsel or his or her designees in 
accordance with 12 CFR 265.6 to conduct a formal investigative 
proceeding.


Sec.  263.452  Conduct of a formal investigative proceeding.

    (a) A formal investigative proceeding may be initiated upon 
issuance of an order of investigation by the Board or by the General 
Counsel or his or her designees in accordance with 12 CFR 265.6. The 
order of investigation must indicate the purpose of the formal 
investigative proceeding and designate the Board's representatives to 
direct the conduct of the investigation.
    (b) Any person who is compelled or requested to furnish documentary 
evidence or testimony at a formal investigative proceeding may, upon 
request, inspect a copy of the order of investigation at a time and 
place that the Board's designated representative determines to be 
appropriate. Any person who is compelled or requested to furnish 
documentary evidence or testimony in a formal investigative proceeding 
may not refuse to comply with a subpoena on the grounds that the order 
of investigation was not made available in advance of the date of 
production or testimony set forth in a subpoena.
    (c) Copies of an order of investigation may not be produced to or 
retained by any person except with the express written approval of the 
Board officer supervising the investigation. The Board may provide a 
copy of an order of investigation, in whole or in part, if the Board 
officer concludes, in the officer's discretion, that disclosure of the 
order of investigation would not infringe upon the privacy of persons 
involved in the investigation or impede the conduct of the 
investigation.


Sec.  263.453  Powers of the designated representative.

    The designated representative conducting the formal investigative 
proceeding will have the power to administer oaths and affirmations, to 
take and preserve testimony under oath, to issue subpoenas ad 
testificandum and subpoenas duces tecum and to apply for their 
enforcement to the United States District Court for the judicial 
district or the United States court in any territory in which the 
witness or company subpoenaed resides or conducts business, or such 
other judicial district provided by law.


Sec.  263.454  Confidentiality of proceedings.

    Formal investigative proceedings conducted pursuant to this subpart 
are confidential and, unless otherwise ordered or permitted by the 
Board, or required by law, the entire record of any formal 
investigative proceeding, including the order of investigation 
authorizing the proceeding, the transcripts of such proceeding, and all 
documents and information obtained by the designated representative(s) 
during the course of the formal investigative proceeding will be 
confidential. If the Board issues a notice of charges or otherwise 
initiates an administrative (adjudicatory) hearing, disclosure of 
documents and information obtained by the Board's designated 
representative(s) during the course of the formal investigative 
proceeding will be governed by the Uniform Rules and the Board Local 
Rules Supplementing the Uniform Rules (subparts A and B of this part).


Sec.  263.455  Transcripts.

    (a) Transcripts of testimony, if any, must be recorded by an 
official reporter, or by any other person or means designated by the 
designated representative conducting the investigation.
    (b) Transcripts will be treated as confidential and must not be 
disclosed to any party except as provided in this subpart or as 
otherwise ordered or permitted by the Board, or required by law or 
regulation.


Sec.  263.456  Rights of witnesses.

    (a) Any witness in a formal investigative proceeding may be 
accompanied and advised by an attorney personally representing that 
witness.
    (1) Such attorney must be a member in good standing of the bar of 
any state, Commonwealth, possession, territory, or the District of 
Columbia, who has not been suspended or debarred from practice before 
the Board in accordance with any provision of this part, including 
paragraph (a)(4) of this section.
    (2) Such attorney may advise the witness before, during, and after 
the taking of the witness' testimony and may briefly question the 
witness, on the record, at the conclusion of the witness' testimony, 
for the sole purpose of clarifying any of the answers the witness has 
given. During the taking of the testimony of a witness, such attorney 
may make summary notes solely for the attorney's use in representing 
the witness. Neither the attorney nor witness may retain copies of 
exhibits used or introduced in the course of a witness' testimony.
    (3) All witnesses must be sequestered, and, unless permitted in the 
discretion of the designated representative, no witness or accompanying 
attorney may be present during the taking of testimony of any other 
witness called in such formal investigative proceeding. Attorneys for 
any other interested persons or entities will not, unless permitted in 
the discretion of the designated representative, have a right to be 
present during the testimony of any witness not personally being 
represented by such attorneys.
    (4) The Board, for good cause, may exclude a particular attorney 
from further participation in any formal investigative proceeding in 
which the Board has found the attorney to have engaged in dilatory, 
obstructionist, egregious, contemptuous, or contumacious conduct. The 
designated representative conducting the formal investigative 
proceeding may report to the Board instances of apparently dilatory, 
obstructionist, egregious, contemptuous, or contumacious conduct on the 
part of an attorney. After due notice to the attorney, the Board may 
take such action as the circumstances warrant, including suspending any 
attorney representing a witness from further participation in the 
investigative proceeding, based upon a written record evidencing the 
conduct of the attorney in the formal investigative proceeding or such 
other or additional written or oral presentation as the Board may 
permit or direct.
    (b) A witness may inspect the transcript of the witness' own 
testimony, without retaining a copy thereof, for the purpose of making 
non-substantive corrections to the transcript at a time and place that 
the designated representative determines to be appropriate in 
consideration of all relevant factors, including the convenience of the 
witness.
    (c) A witness may, solely for the use of the witness and the 
witness' attorney, obtain a copy of the transcript of the witness' 
testimony, provided that the witness submits a written request for the 
transcript and the witness requesting a copy of the witness' testimony 
bears the cost thereof. However, the Board officer supervising the 
formal investigative

[[Page 89923]]

proceeding may deny such a request if, in the officer's discretion, the 
provision of the transcript may infringe the privacy of third persons 
involved in the investigation, or impede or interfere with the conduct 
of any investigation. If the Board issues a notice of charges or 
otherwise initiates an administrative (adjudicatory) hearing, 
disclosure of formal investigative transcripts obtained by the Board's 
designated representative(s) during the course of the formal 
investigative proceeding will be governed by the Uniform Rules and the 
Board Local Rules Supplementing the Uniform Rules (subparts A and B of 
this part).


Sec.  263.457  Subpoenas.

    (a) Service. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (3) By delivery to an agent which, in the case of a corporation or 
other association, is delivery to an officer, director, managing or 
general agent, or to any other agent authorized by appointment or by 
law to receive service and, if the agent is one authorized by statute 
to receive service and the statute so requires, by also mailing a copy 
to the party;
    (4) By registered or certified mail or by an express delivery 
service addressed to the person's or authorized agent's last known 
address; or
    (5) In such other manner as is reasonably calculated to give actual 
notice.
    (b) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing or testimony is held, provided that if service is 
made on a foreign bank in connection with an action or proceeding 
involving one or more of its branches or agencies located in any state, 
territory, possession of the United States, or the District of 
Columbia, service must be made on at least one branch or agency so 
involved. Foreign nationals are subject to such subpoenas if such 
service is made upon a duly authorized agent located in the United 
States or such other means permissible by law.
    (c) Witness fees and mileage. Witnesses summoned in any proceeding 
under this subpart must be paid the same fees and mileage that are paid 
witnesses in the district courts of the United States. Such fees and 
mileage need not be tendered when the subpoena is issued on behalf of 
the Board by any of its designated representatives.

0
22. Appendix A is added to read as follows:

Appendix A to Part 263--Rules Applicable to Proceedings Initiated 
Before April 1, 2024

    Note:  The content of this appendix reproduces the Uniform Rules 
of Practice and Procedure and Board Local Rules Supplementing the 
Uniform Rules in 12 CFR part 263, subparts A and B, respectively, as 
of April 1, 2024, and apply only to adjudicatory proceedings 
initiated before April 1, 2024. Proceedings initiated on or after 
April 1, 2024, are not governed by the version of the rules set out 
in this appendix. Cross-references to part 263 (as well as to 
included sections) in this appendix are to those provisions as 
contained within this appendix.

Subpart A--Uniform Rules of Practice and Procedure
263.1 Scope.
263.2 Rules of construction.
263.3 Definitions.
263.4 Authority of the Board.
263.5 Authority of the administrative law judge.
263.6 Appearance and practice in adjudicatory proceedings.
263.7 Good faith certification.
263.8 Conflicts of interest.
263.9 Ex parte communications.
263.10 Filing of papers.
263.11 Service of papers.
263.12 Construction of time limits.
263.13 Change of time limits.
263.14 Witness fees and expenses.
263.15 Opportunity for informal settlement.
263.16 The Board's right to conduct examination.
263.17 Collateral attacks on adjudicatory proceeding.
263.18 Commencement of proceeding and contents of notice.
263.19 Answer.
263.20 Amended pleadings.
263.21 Failure to appear.
263.22 Consolidation and severance of actions.
263.23 Motions.
263.24 Scope of document discovery.
263.25 Request for document discovery from parties.
263.26 Document subpoenas to nonparties.
263.27 Deposition of witness unavailable for hearing.
263.28 Interlocutory review.
263.29 Summary disposition.
263.30 Partial summary disposition.
263.31 Scheduling and prehearing conferences.
263.32 Prehearing submissions.
263.33 Public hearings.
263.34 Hearing subpoenas.
263.35 Conduct of hearings.
263.36 Evidence.
263.37 Post-hearing filings.
263.38 Recommended decision and filing of record.
263.39 Exceptions to recommended decision.
263.40 Review by the Board.
263.41 Stays pending judicial review.
Subpart B--Board Local Rules Supplementing Uniform Rules
263.50 Purpose and scope.
263.51 Definitions.
263.52 Address for filing.
263.53 Discovery depositions.
263.54 Delegation to the Office of Financial Institution 
Adjudication.
263.55 Board as Presiding Officer.
263.56 Initial licensing proceedings.

Subpart A--Uniform Rules of Practice and Procedure


Sec.  263.1  Scope.

    This subpart prescribes Uniform Rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record after opportunity for hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal 
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the Board of Governors of 
the Federal Reserve System (``Board'') should issue an order to approve 
or disapprove a person's proposed acquisition of a state member bank, 
bank holding company, or savings and loan holding company;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions 
upon any government securities broker or dealer or upon any person 
associated or seeking to become associated with a government securities 
broker or dealer for which the Board is the appropriate agency;
    (e) Assessment of civil money penalties by the Board against 
institutions, institution-affiliated parties, and certain other persons 
for which the Board is the appropriate agency for any violation of:
    (1) Any provision of the Bank Holding Company Act of 1956, as 
amended (``BHC Act''), or any order or regulation issued thereunder, 
pursuant to 12 U.S.C. 1847(b) and (d);
    (2) Sections 19, 22, 23, 23A and 23B of the Federal Reserve Act 
(``FRA''), or any regulation or order issued

[[Page 89924]]

thereunder and certain unsafe or unsound practices or breaches of 
fiduciary duty, pursuant to 12 U.S.C. 504 and 505;
    (3) Section 9 of the FRA pursuant to 12 U.S.C. 324;
    (4) Section 106(b) of the Bank Holding Company Act Amendments of 
1970 and certain unsafe or unsound practices or breaches of fiduciary 
duty, pursuant to 12 U.S.C. 1972(2)(F);
    (5) Any provision of the Change in Bank Control Act of 1978, as 
amended, or any regulation or order issued thereunder and certain 
unsafe or unsound practices or breaches of fiduciary duty, pursuant to 
12 U.S.C. 1817(j)(16);
    (6) Any provision of the International Lending Supervision Act of 
1983 (``ILSA'') or any rule, regulation or order issued thereunder, 
pursuant to 12 U.S.C. 3909;
    (7) Any provision of the International Banking Act of 1978 
(``IBA'') or any rule, regulation or order issued thereunder, pursuant 
to 12 U.S.C. 3108;
    (8) Certain provisions of the Exchange Act, pursuant to section 21B 
of the Exchange Act (15 U.S.C. 78u-2);
    (9) Section 1120 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (12 U.S.C. 3349), or any order or 
regulation issued thereunder;
    (10) The terms of any final or temporary order issued under section 
8 of the FDIA or of any written agreement executed by the Board, the 
terms of any condition imposed in writing by the Board in connection 
with the grant of an application or request, and certain unsafe or 
unsound practices or breaches of fiduciary duty or law or regulation 
pursuant to 12 U.S.C. 1818(i)(2);
    (11) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder;
    (12) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued thereunder;
    (13) Section 5 of the Home Owners' Loan Act (``HOLA'') or any 
regulation or order issued thereunder, pursuant to 12 U.S.C. 1464 (d), 
(s) and (v);
    (14) Section 9 of the HOLA or any regulation or order issued 
thereunder, pursuant to 12 U.S.C. 1467(d); and
    (15) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a (i) and 
(r);
    (f) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g));
    (g) Removal, prohibition, and civil monetary penalty proceedings 
under section 10(k) of the FDI Act (12 U.S.C. 1820(k)) for violations 
of the special post-employment restrictions imposed by that section; 
and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules.


Sec.  263.2  Rules of construction.

    For purposes of this subpart:
    (a) Any term in the singular includes the plural, and the plural 
includes the singular, if such use would be appropriate;
    (b) Any use of a masculine, feminine, or neuter gender encompasses 
all three, if such use would be appropriate;
    (c) The term counsel includes a non-attorney representative; and
    (d) Unless the context requires otherwise, a party's counsel of 
record, if any, may, on behalf of that party, take any action required 
to be taken by the party.


Sec.  263.3  Definitions.

    For purposes of this subpart, unless explicitly stated to the 
contrary:
    (a) Administrative law judge means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (c) Decisional employee means any member of the Board's or 
administrative law judge's staff who has not engaged in an 
investigative or prosecutorial role in a proceeding and who may assist 
the Agency or the administrative law judge, respectively, in preparing 
orders, recommended decisions, decisions, and other documents under the 
Uniform Rules.
    (d) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the Board in an adjudicatory 
proceeding.
    (e) Final order means an order issued by the Board with or without 
the consent of the affected institution or the institution-affiliated 
party, that has become final, without regard to the pendency of any 
petition for reconsideration or review.
    (f) Institution includes: (1) Any bank as that term is defined in 
section 3(a) of the FDIA (12 U.S.C. 1813(a));
    (2) Any bank holding company or any subsidiary (other than a bank) 
of a bank holding company as those terms are defined in the BHC Act (12 
U.S.C. 1841 et seq.);
    (3) Any organization operating under section 25 of the FRA (12 
U.S.C. 601 et seq.);
    (4) Any foreign bank or company to which section 8 of the IBA (12 
U.S.C. 3106), applies or any subsidiary (other than a bank) thereof;
    (5) Any Federal agency as that term is defined in section 1(b) of 
the IBA (12 U.S.C. 3101(5)); and
    (6) Any savings and loan holding company or any subsidiary (other 
than a savings association) of a savings and loan holding company as 
those terms are defined in the HOLA (12 U.S.C. 1461 et seq.).
    (g) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 3(u) of the FDIA (12 U.S.C. 
1813(u)).
    (h) Local Rules means those rules promulgated by the Board in this 
part other than subpart A.
    (i) OFIA means the Office of Financial Institution Adjudication, 
the executive body charged with overseeing the administration of 
administrative enforcement proceedings for the Board, the Office of 
Comptroller of the Currency (the OCC), the Federal Deposit Insurance 
Corporation (the FDIC), and the National Credit Union Administration 
(the NCUA).
    (j) Party means the Board and any person named as a party in any 
notice.
    (k) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency or other entity or organization, including an 
institution as defined in paragraph (f) of this section.
    (l) Respondent means any party other than the Board.
    (m) Uniform Rules means those rules in subpart A of this part that 
are common to the Board, the OCC, the FDIC, and the NCUA.
    (n) Violation includes any action (alone or with another or others) 
for or toward causing, bringing about, participating in, counseling, or 
aiding or abetting a violation.


Sec.  263.4  Authority of the Board.

    The Board may, at any time during the pendency of a proceeding, 
perform, direct the performance of, or waive performance of, any act 
which could be done or ordered by the administrative law judge.


Sec.  263.5  Authority of the administrative law judge.

    (a) General rule. All proceedings governed by this part shall be 
conducted in accordance with the provisions of chapter 5 of title 5 of 
the United States Code. The administrative law judge shall have all 
powers necessary to conduct a proceeding in a fair and impartial manner 
and to avoid unnecessary delay.

[[Page 89925]]

    (b) Powers. The administrative law judge shall have all powers 
necessary to conduct the proceeding in accordance with paragraph (a) of 
this section, including the following powers:
    (1) To administer oaths and affirmations;
    (2) To issue subpoenas, subpoenas duces tecum, and protective 
orders, as authorized by this part, and to quash or modify any such 
subpoenas and orders;
    (3) To receive relevant evidence and to rule upon the admission of 
evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
subpart;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling and/or pre-hearing conferences as set forth 
in Sec.  263.31;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the Board 
shall have the power to grant any motion to dismiss the proceeding or 
to decide any other motion that results in a final determination of the 
merits of the proceeding;
    (8) To prepare and present to the Board a recommended decision as 
provided herein;
    (9) To recuse himself or herself by motion made by a party or on 
his or her own motion;
    (10) To establish time, place and manner limitations on the 
attendance of the public and the media for any public hearing; and
    (11) To do all other things necessary and appropriate to discharge 
the duties of a presiding officer.


Sec.  263.6  Appearance and practice in adjudicatory proceedings.

    (a) Appearance before the Board or an administrative law judge--(1) 
By attorneys. Any member in good standing of the bar of the highest 
court of any state, commonwealth, possession, territory of the United 
States, or the District of Columbia may represent others before the 
Board if such attorney is not currently suspended or debarred from 
practice before the Board.
    (2) By non-attorneys. An individual may appear on his or her own 
behalf; a member of a partnership may represent the partnership; a duly 
authorized officer, director, or employee of any government unit, 
agency, institution, corporation or authority may represent that unit, 
agency, institution, corporation or authority if such officer, 
director, or employee is not currently suspended or debarred from 
practice before the Board.
    (3) Notice of appearance. Any individual acting as counsel on 
behalf of a party, including the Board, shall file a notice of 
appearance with OFIA at or before the time that individual submits 
papers or otherwise appears on behalf of a party in the adjudicatory 
proceeding. The notice of appearance must include a written declaration 
that the individual is currently qualified as provided in paragraph 
(a)(1) or (a)(2) of this section and is authorized to represent the 
particular party. By filing a notice of appearance on behalf of a party 
in an adjudicatory proceeding, the counsel agrees and represents that 
he or she is authorized to accept service on behalf of the represented 
party and that, in the event of withdrawal from representation, he or 
she will, if required by the administrative law judge, continue to 
accept service until new counsel has filed a notice of appearance or 
until the represented party indicates that he or she will proceed on a 
pro se basis.
    (b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or 
contumacious conduct at any phase of any adjudicatory proceeding may be 
grounds for exclusion or suspension of counsel from the proceeding.


Sec.  263.7  Good faith certification.

    (a) General requirement. Every filing or submission of record 
following the issuance of a notice shall be signed by at least one 
counsel of record in his or her individual name and shall state that 
counsel's address and telephone number. A party who acts as his or her 
own counsel shall sign his or her individual name and state his or her 
address and telephone number on every filing or submission of record.
    (b) Effect of signature. (1) The signature of counsel or a party 
shall constitute a certification that: the counsel or party has read 
the filing or submission of record; to the best of his or her 
knowledge, information, and belief formed after reasonable inquiry, the 
filing or submission of record is well-grounded in fact and is 
warranted by existing law or a good faith argument for the extension, 
modification, or reversal of existing law; and the filing or submission 
of record is not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.
    (2) If a filing or submission of record is not signed, the 
administrative law judge shall strike the filing or submission of 
record, unless it is signed promptly after the omission is called to 
the attention of the pleader or movant.
    (c) Effect of making oral motion or argument. The act of making any 
oral motion or oral argument by any counsel or party constitutes a 
certification that to the best of his or her knowledge, information, 
and belief formed after reasonable inquiry, his or her statement is 
well-grounded in fact and is warranted by existing law or a good faith 
argument for the extension, modification, or reversal of existing law, 
and is not made for any improper purpose, such as to harass or to cause 
unnecessary delay or needless increase in the cost of litigation.


Sec.  263.8  Conflicts of interest.

    (a) Conflict of interest in representation. No person shall appear 
as counsel for another person in an adjudicatory proceeding if it 
reasonably appears that such representation may be materially limited 
by that counsel's responsibilities to a third person or by the 
counsel's own interests. The administrative law judge may take 
corrective measures at any stage of a proceeding to cure a conflict of 
interest in representation, including the issuance of an order limiting 
the scope of representation or disqualifying an individual from 
appearing in a representative capacity for the duration of the 
proceeding.
    (b) Certification and waiver. If any person appearing as counsel 
represents two or more parties to an adjudicatory proceeding or also 
represents a non-party on a matter relevant to an issue in the 
proceeding, counsel must certify in writing at the time of filing the 
notice of appearance required by Sec.  263.6(a):
    (1) That the counsel has personally and fully discussed the 
possibility of conflicts of interest with each such party and non-
party; and
    (2) That each such party and non-party waives any right it might 
otherwise have had to assert any known conflicts of interest or to 
assert any non-material conflicts of interest during the course of the 
proceeding.


Sec.  263.9  Ex parte communications.

    (a) Definition--(1) Ex parte communication means any material oral 
or written communication relevant to the merits of an adjudicatory 
proceeding that was neither on the record nor on reasonable prior 
notice to all parties that takes place between:
    (i) An interested person outside the Board (including such person's 
counsel); and
    (ii) The administrative law judge handling that proceeding, a 
member of the Board, or a decisional employee.

[[Page 89926]]

    (2) Exception. A request for status of the proceeding does not 
constitute an ex parte communication.
    (b) Prohibition of ex parte communications. From the time the 
notice is issued by the Board until the date that the Board issues its 
final decision pursuant to Sec.  263.40(c):
    (1) No interested person outside the Federal Reserve System shall 
make or knowingly cause to be made an ex parte communication to a 
member of the Board, the administrative law judge, or a decisional 
employee; and
    (2) A member of the Board, administrative law judge, or decisional 
employee shall not make or knowingly cause to be made to any interested 
person outside the Federal Reserve System any ex parte communication.
    (c) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the administrative law judge, a 
member of the Board or any other person identified in paragraph (a) of 
this section, that person shall cause all such written communications 
(or, if the communication is oral, a memorandum stating the substance 
of the communication) to be placed on the record of the proceeding and 
served on all parties. All other parties to the proceeding shall have 
an opportunity, within ten days of receipt of service of the ex parte 
communication, to file responses thereto and to recommend any 
sanctions, in accordance with paragraph (d) of this section, that they 
believe to be appropriate under the circumstances.
    (d) Sanctions. Any party or his or her counsel who makes a 
prohibited ex parte communication, or who encourages or solicits 
another to make any such communication, may be subject to any 
appropriate sanction or sanctions imposed by the Board or the 
administrative law judge including, but not limited to, exclusion from 
the proceedings and an adverse ruling on the issue which is the subject 
of the prohibited communication.
    (e) Separation of functions. Except to the extent required for the 
disposition of ex parte matters as authorized by law, the 
administrative law judge may not consult a person or party on any 
matter relevant to the merits of the adjudication, unless on notice and 
opportunity for all parties to participate. An employee or agent 
engaged in the performance of investigative or prosecuting functions 
for the Board in a case may not, in that or a factually related case, 
participate or advise in the decision, recommended decision, or agency 
review of the recommended decision under Sec.  263.40, except as 
witness or counsel in public proceedings.


Sec.  263.10  Filing of papers.

    (a) Filing. Any papers required to be filed, excluding documents 
produced in response to a discovery request pursuant to Sec. Sec.  
263.25 and 263.26, shall be filed with OFIA, except as otherwise 
provided.
    (b) Manner of filing. Unless otherwise specified by the Board or 
the administrative law judge, filing may be accomplished by:
    (1) Personal service;
    (2) Delivering the papers to a reliable commercial courier service, 
overnight delivery service, or to the U.S. Post Office for Express Mail 
delivery;
    (3) Mailing the papers by first class, registered, or certified 
mail; or
    (4) Transmission by electronic media, only if expressly authorized, 
and upon any conditions specified, by the Board or the administrative 
law judge. All papers filed by electronic media shall also concurrently 
be filed in accordance with paragraph (c) of this section.
    (c) Formal requirements as to papers filed--(1) Form. All papers 
filed must set forth the name, address, and telephone number of the 
counsel or party making the filing and must be accompanied by a 
certification setting forth when and how service has been made on all 
other parties. All papers filed must be double-spaced and printed or 
typewritten on 8\1/2\ x 11 inch paper, and must be clear and legible.
    (2) Signature. All papers must be dated and signed as provided in 
Sec.  263.7.
    (3) Caption. All papers filed must include at the head thereof, or 
on a title page, the name of the Board and of the filing party, the 
title and docket number of the proceeding, and the subject of the 
particular paper.
    (4) Number of copies. Unless otherwise specified by the Board, or 
the administrative law judge, an original and one copy of all documents 
and papers shall be filed, except that only one copy of transcripts of 
testimony and exhibits shall be filed.


Sec.  263.11  Service of papers.

    (a) By the parties. Except as otherwise provided, a party filing 
papers shall serve a copy upon the counsel of record for all other 
parties to the proceeding so represented, and upon any party not so 
represented.
    (b) Method of service. Except as provided in paragraphs (c)(2) and 
(d) of this section, a serving party shall use one or more of the 
following methods of service:
    (1) Personal service;
    (2) Delivering the papers to a reliable commercial courier service, 
overnight delivery service, or to the U.S. Post Office for Express Mail 
delivery;
    (3) Mailing the papers by first class, registered, or certified 
mail; or
    (4) Transmission by electronic media, only if the parties mutually 
agree. Any papers served by electronic media shall also concurrently be 
served in accordance with the requirements of Sec.  263.10(c).
    (c) By the Board or the administrative law judge. (1) All papers 
required to be served by the Board or the administrative law judge upon 
a party who has appeared in the proceeding in accordance with Sec.  
263.6, shall be served by any means specified in paragraph (b) of this 
section.
    (2) If a party has not appeared in the proceeding in accordance 
with Sec.  263.6, the Board or the administrative law judge shall make 
service by any of the following methods:
    (i) By personal service;
    (ii) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (iii) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
party;
    (iv) By registered or certified mail addressed to the person's last 
known address; or
    (v) By any other method reasonably calculated to give actual 
notice.
    (d) Subpoenas. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (3) By delivery to an agent, which, in the case of a corporation or 
other association, is delivery to an officer, managing or general 
agent, or to any other agent authorized by appointment or by law to 
receive service and, if the agent is one authorized by statute to 
receive service and the statute so requires, by also mailing a copy to 
the party;
    (4) By registered or certified mail addressed to the person's last 
known address; or
    (5) By any other method as is reasonably calculated to give actual 
notice.
    (e) Area of service. Service in any state, territory, possession of 
the United

[[Page 89927]]

States, or the District of Columbia, on any person or company doing 
business in any state, territory, possession of the United States, or 
the District of Columbia, or on any person as otherwise provided by 
law, is effective without regard to the place where the hearing is 
held, provided that if service is made on a foreign bank in connection 
with an action or proceeding involving one or more of its branches or 
agencies located in any state, territory, possession of the United 
States, or the District of Columbia, service shall be made on at least 
one branch or agency so involved.


Sec.  263.12  Construction of time limits.

    (a) General rule. In computing any period of time prescribed by 
this subpart, the date of the act or event that commences the 
designated period of time is not included. The last day so computed is 
included unless it is a Saturday, Sunday, or Federal holiday. When the 
last day is a Saturday, Sunday, or Federal holiday, the period runs 
until the end of the next day that is not a Saturday, Sunday, or 
Federal holiday. Intermediate Saturdays, Sundays, and Federal holidays 
are included in the computation of time. However, when the time period 
within which an act is to be performed is ten days or less, not 
including any additional time allowed for in paragraph (c) of this 
section, intermediate Saturdays, Sundays, and Federal holidays are not 
included.
    (b) When papers are deemed to be filed or served. (1) Filing and 
service are deemed to be effective:
    (i) In the case of personal service or same-day commercial courier 
delivery, upon actual service;
    (ii) In the case of overnight commercial delivery service, U.S. 
Express Mail delivery, or first class, registered, or certified mail, 
upon deposit in or delivery to an appropriate point of collection;
    (iii) In the case of transmission by electronic media, as specified 
by the authority receiving the filing, in the case of filing, and as 
agreed among the parties, in the case of service.
    (2) The effective filing and service dates specified in paragraph 
(b)(1) of this section may be modified by the Board or administrative 
law judge in the case of filing or by agreement of the parties in the 
case of service.
    (c) Calculation of time for service and filing of responsive 
papers. Whenever a time limit is measured by a prescribed period from 
the service of any notice or paper, the applicable time limits are 
calculated as follows:
    (1) If service is made by first class, registered, or certified 
mail, add three calendar days to the prescribed period;
    (2) If service is made by express mail or overnight delivery 
service, add one calendar day to the prescribed period; or
    (3) If service is made by electronic media transmission, add one 
calendar day to the prescribed period, unless otherwise determined by 
the Board or the administrative law judge in the case of filing, or by 
agreement among the parties in the case of service.


Sec.  263.13  Change of time limits.

    Except as otherwise provided by law, the administrative law judge 
may, for good cause shown, extend the time limits prescribed by the 
Uniform Rules or by any notice or order issued in the proceedings. 
After the referral of the case to the Board pursuant to Sec.  263.38, 
the Board may grant extensions of the time limits for good cause shown. 
Extensions may be granted at the motion of a party after notice and 
opportunity to respond is afforded all non-moving parties or sua sponte 
by the Board or the administrative law judge.


Sec.  263.14  Witness fees and expenses.

    Witnesses subpoenaed for testimony or depositions shall be paid the 
same fees for attendance and mileage as are paid in the United States 
district courts in proceedings in which the United States is a party, 
provided that, in the case of a discovery subpoena addressed to a 
party, no witness fees or mileage need be paid. Fees for witnesses 
shall be tendered in advance by the party requesting the subpoena, 
except that fees and mileage need not be tendered in advance where the 
Board is the party requesting the subpoena. The Board shall not be 
required to pay any fees to, or expenses of, any witness not subpoenaed 
by the Board.


Sec.  263.15  Opportunity for informal settlement.

    Any respondent may, at any time in the proceeding, unilaterally 
submit to Enforcement Counsel written offers or proposals for 
settlement of a proceeding, without prejudice to the rights of any of 
the parties. No such offer or proposal shall be made to any Board 
representative other than Enforcement Counsel. Submission of a written 
settlement offer does not provide a basis for adjourning or otherwise 
delaying all or any portion of a proceeding under this part. No 
settlement offer or proposal, or any subsequent negotiation or 
resolution, is admissible as evidence in any proceeding.


Sec.  263.16  The Board's right to conduct examination.

    Nothing contained in this subpart limits in any manner the right of 
the Board or any Federal Reserve Bank to conduct any examination, 
inspection, or visitation of any institution or institution-affiliated 
party, or the right of the Board or any Federal Reserve Bank to conduct 
or continue any form of investigation authorized by law.


Sec.  263.17  Collateral attacks on adjudicatory proceeding.

    If an interlocutory appeal or collateral attack is brought in any 
court concerning all or any part of an adjudicatory proceeding, the 
challenged adjudicatory proceeding shall continue without regard to the 
pendency of that court proceeding. No default or other failure to act 
as directed in the adjudicatory proceeding within the times prescribed 
in this subpart shall be excused based on the pendency before any court 
of any interlocutory appeal or collateral attack.


Sec.  263.18  Commencement of proceeding and contents of notice.

    (a) Commencement of proceeding. (1)(i) Except for change-in-control 
proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), a 
proceeding governed by this subpart is commenced by issuance of a 
notice by the Board.
    (ii) The notice must be served by the Board upon the respondent and 
given to any other appropriate financial institution supervisory 
authority where required by law.
    (iii) The notice must be filed with OFIA.
    (2) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the 
Board.
    (b) Contents of notice. The notice must set forth:
    (1) The legal authority for the proceeding and for the Board's 
jurisdiction over the proceeding;
    (2) A statement of the matters of fact or law showing that the 
Board is entitled to relief;
    (3) A proposed order or prayer for an order granting the requested 
relief;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as required by law or 
regulation;
    (6) The time within which to request a hearing as required by law 
or regulation; and
    (7) That the answer and/or request for a hearing shall be filed 
with OFIA.

[[Page 89928]]

Sec.  263.19  Answer.

    (a) When. Within 20 days of service of the notice, respondent shall 
file an answer as designated in the notice. In a civil money penalty 
proceeding, respondent shall also file a request for a hearing within 
20 days of service of the notice.
    (b) Content of answer. An answer must specifically respond to each 
paragraph or allegation of fact contained in the notice and must admit, 
deny, or state that the party lacks sufficient information to admit or 
deny each allegation of fact. A statement of lack of information has 
the effect of a denial. Denials must fairly meet the substance of each 
allegation of fact denied; general denials are not permitted. When a 
respondent denies part of an allegation, that part must be denied and 
the remainder specifically admitted. Any allegation of fact in the 
notice which is not denied in the answer must be deemed admitted for 
purposes of the proceeding. A respondent is not required to respond to 
the portion of a notice that constitutes the prayer for relief or 
proposed order. The answer must set forth affirmative defenses, if any, 
asserted by the respondent.
    (c) Default--(1) Effect of failure to answer. Failure of a 
respondent to file an answer required by this section within the time 
provided constitutes a waiver of his or her right to appear and contest 
the allegations in the notice. If no timely answer is filed, 
Enforcement Counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the administrative law judge shall file with the 
Board a recommended decision containing the findings and the relief 
sought in the notice. Any final order issued by the Board based upon a 
respondent's failure to answer is deemed to be an order issued upon 
consent.
    (2) Effect of failure to request a hearing in civil money penalty 
proceedings. If respondent fails to request a hearing as required by 
law within the time provided, the notice of assessment constitutes a 
final and unappealable order.


Sec.  263.20  Amended pleadings.

    (a) Amendments. The notice or answer may be amended or supplemented 
at any stage of the proceeding. The respondent must answer an amended 
notice within the time remaining for the respondent's answer to the 
original notice, or within ten days after service of the amended 
notice, whichever period is longer, unless the Board or administrative 
law judge orders otherwise for good cause.
    (b) Amendments to conform to the evidence. When issues not raised 
in the notice or answer are tried at the hearing by express or implied 
consent of the parties, they will be treated in all respects as if they 
had been raised in the notice or answer, and no formal amendments are 
required. If evidence is objected to at the hearing on the ground that 
it is not within the issues raised by the notice or answer, the 
administrative law judge may admit the evidence when admission is 
likely to assist in adjudicating the merits of the action and the 
objecting party fails to satisfy the administrative law judge that the 
admission of such evidence would unfairly prejudice that party's action 
or defense upon the merits. The administrative law judge may grant a 
continuance to enable the objecting party to meet such evidence.


Sec.  263.21  Failure to appear.

    Failure of a respondent to appear in person at the hearing or by a 
duly authorized counsel constitutes a waiver of respondent's right to a 
hearing and is deemed an admission of the facts as alleged and consent 
to the relief sought in the notice. Without further proceedings or 
notice to the respondent, the administrative law judge shall file with 
the Board a recommended decision containing the findings and the relief 
sought in the notice.


Sec.  263.22  Consolidation and severance of actions.

    (a) Consolidation. (1) On the motion of any party, or on the 
administrative law judge's own motion, the administrative law judge may 
consolidate, for some or all purposes, any two or more proceedings, if 
each such proceeding involves or arises out of the same transaction, 
occurrence or series of transactions or occurrences, or involves at 
least one common respondent or a material common question of law or 
fact, unless such consolidation would cause unreasonable delay or 
injustice.
    (2) In the event of consolidation under paragraph (a)(1) of this 
section, appropriate adjustment to the prehearing schedule shall be 
made to avoid unnecessary expense, inconvenience, or delay.
    (b) Severance. The administrative law judge may, upon the motion of 
any party, sever the proceeding for separate resolution of the matter 
as to any respondent only if the administrative law judge finds that:
    (1) Undue prejudice or injustice to the moving party would result 
from not severing the proceeding; and
    (2) Such undue prejudice or injustice would outweigh the interests 
of judicial economy and expedition in the complete and final resolution 
of the proceeding.


Sec.  263.23  Motions.

    (a) In writing. (1) Except as otherwise provided herein, an 
application or request for an order or ruling must be made by written 
motion.
    (2) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.
    (3) No oral argument may be held on written motions except as 
otherwise directed by the administrative law judge. Written memoranda, 
briefs, affidavits or other relevant material or documents may be filed 
in support of or in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the administrative law judge directs that such motion be reduced to 
writing.
    (c) Filing of motions. Motions must be filed with the 
administrative law judge, except that following the filing of the 
recommended decision, motions must be filed with the Board.
    (d) Responses. (1) Except as otherwise provided herein, within ten 
days after service of any written motion, or within such other period 
of time as may be established by the administrative law judge or the 
Board, any party may file a written response to a motion. The 
administrative law judge shall not rule on any oral or written motion 
before each party has had an opportunity to file a response.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed a consent by that party to the 
entry of an order substantially in the form of the order accompanying 
the motion.
    (e) Dilatory motions. Frivolous, dilatory or repetitive motions are 
prohibited. The filing of such motions may form the basis for 
sanctions.
    (f) Dispositive motions. Dispositive motions are governed by 
Sec. Sec.  263.29 and 263.30.


Sec.  263.24  Scope of document discovery.

    (a) Limits on discovery. (1) Subject to the limitations set out in 
paragraphs (b), (c), and (d) of this section, a party to a proceeding 
under this subpart may obtain document discovery by serving a written 
request to produce documents. For purposes of a request to produce 
documents, the term ``documents'' may be defined to include drawings, 
graphs,

[[Page 89929]]

charts, photographs, recordings, data stored in electronic form, and 
other data compilations from which information can be obtained, or 
translated, if necessary, by the parties through detection devices into 
reasonably usable form, as well as written material of all kinds.
    (2) Discovery by use of deposition is governed by Sec.  263.53 of 
subpart B of this part.
    (3) Discovery by use of interrogatories is not permitted.
    (b) Relevance. A party may obtain document discovery regarding any 
matter, not privileged, that has material relevance to the merits of 
the pending action. Any request to produce documents that calls for 
irrelevant material, that is unreasonable, oppressive, excessive in 
scope, unduly burdensome, or repetitive of previous requests, or that 
seeks to obtain privileged documents will be denied or modified. A 
request is unreasonable, oppressive, excessive in scope or unduly 
burdensome if, among other things, it fails to include justifiable 
limitations on the time period covered and the geographic locations to 
be searched, the time provided to respond in the request is inadequate, 
or the request calls for copies of documents to be delivered to the 
requesting party and fails to include the requestor's written agreement 
to pay in advance for the copying, in accordance with Sec.  263.25.
    (c) Privileged matter. Privileged documents are not discoverable. 
Privileges include the attorney-client privilege, work-product 
privilege, any government's or government agency's deliberative-process 
privilege, and any other privileges the Constitution, any applicable 
act of Congress, or the principles of common law provide.
    (d) Time limits. All discovery, including all responses to 
discovery requests, shall be completed at least 20 days prior to the 
date scheduled for the commencement of the hearing. No exceptions to 
this time limit shall be permitted, unless the administrative law judge 
finds on the record that good cause exists for waiving the requirements 
of this paragraph.


Sec.  263.25  Request for document discovery from parties.

    (a) General rule. Any party may serve on any other party a request 
to produce for inspection any discoverable documents that are in the 
possession, custody, or control of the party upon whom the request is 
served. The request must identify the documents to be produced either 
by individual item or by category, and must describe each item and 
category with reasonable particularity. Documents must be produced as 
they are kept in the usual course of business or must be organized to 
correspond with the categories in the request.
    (b) Production or copying. The request must specify a reasonable 
time, place, and manner for production and performing any related acts. 
In lieu of inspecting the documents, the requesting party may specify 
that all or some of the responsive documents be copied and the copies 
delivered to the requesting party. If copying of fewer than 250 pages 
is requested, the party to whom the request is addressed shall bear the 
cost of copying and shipping charges. If a party requests 250 pages or 
more of copying, the requesting party shall pay for the copying and 
shipping charges. Copying charges are the current per-page copying rate 
imposed by 12 CFR part 261 implementing the Freedom of Information Act 
(5 U.S.C. 552). The party to whom the request is addressed may require 
payment in advance before producing the documents.
    (c) Obligation to update responses. A party who has responded to a 
discovery request with a response that was complete when made is not 
required to supplement the response to include documents thereafter 
acquired, unless the responding party learns that:
    (1) The response was materially incorrect when made; or
    (2) The response, though correct when made, is no longer true and a 
failure to amend the response is, in substance, a knowing concealment.
    (d) Motions to limit discovery. (1) Any party that objects to a 
discovery request may, within ten days of being served with such 
request, file a motion in accordance with the provisions of Sec.  
263.23 to strike or otherwise limit the request. If an objection is 
made to only a portion of an item or category in a request, the portion 
objected to shall be specified. Any objections not made in accordance 
with this paragraph and Sec.  263.23 are waived.
    (2) The party who served the request that is the subject of a 
motion to strike or limit may file a written response within five days 
of service of the motion. No other party may file a response.
    (e) Privilege. At the time other documents are produced, the 
producing party must reasonably identify all documents withheld on the 
grounds of privilege and must produce a statement of the basis for the 
assertion of privilege. When similar documents that are protected by 
deliberative process, attorney-work-product, or attorney-client 
privilege are voluminous, these documents may be identified by category 
instead of by individual document. The administrative law judge retains 
discretion to determine when the identification by category is 
insufficient.
    (f) Motions to compel production. (1) If a party withholds any 
documents as privileged or fails to comply fully with a discovery 
request, the requesting party may, within ten days of the assertion of 
privilege or of the time the failure to comply becomes known to the 
requesting party, file a motion in accordance with the provisions of 
Sec.  263.23 for the issuance of a subpoena compelling production.
    (2) The party who asserted the privilege or failed to comply with 
the request may file a written response to a motion to compel within 
five days of service of the motion. No other party may file a response.
    (g) Ruling on motions. After the time for filing responses pursuant 
to this section has expired, the administrative law judge shall rule 
promptly on all motions filed pursuant to this section. If the 
administrative law judge determines that a discovery request, or any of 
its terms, calls for irrelevant material, is unreasonable, oppressive, 
excessive in scope, unduly burdensome, or repetitive of previous 
requests, or seeks to obtain privileged documents, he or she may deny 
or modify the request, and may issue appropriate protective orders, 
upon such conditions as justice may require. The pendency of a motion 
to strike or limit discovery or to compel production is not a basis for 
staying or continuing the proceeding, unless otherwise ordered by the 
administrative law judge. Notwithstanding any other provision in this 
part, the administrative law judge may not release, or order a party to 
produce, documents withheld on grounds of privilege if the party has 
stated to the administrative law judge its intention to file a timely 
motion for interlocutory review of the administrative law judge's order 
to produce the documents, and until the motion for interlocutory review 
has been decided.
    (h) Enforcing discovery subpoenas. If the administrative law judge 
issues a subpoena compelling production of documents by a party, the 
subpoenaing party may, in the event of noncompliance and to the extent 
authorized by applicable law, apply to any appropriate United States 
district court for an order requiring compliance with the subpoena. A 
party's right to seek court enforcement of a subpoena shall not in any 
manner limit the sanctions that may be imposed by the administrative 
law judge against a party

[[Page 89930]]

who fails to produce subpoenaed documents.


Sec.  263.26  Document subpoenas to nonparties.

    (a) General rules. (1) Any party may apply to the administrative 
law judge for the issuance of a document discovery subpoena addressed 
to any person who is not a party to the proceeding. The application 
must contain a proposed document subpoena and a brief statement showing 
the general relevance and reasonableness of the scope of documents 
sought. The subpoenaing party shall specify a reasonable time, place, 
and manner for making production in response to the document subpoena.
    (2) A party shall only apply for a document subpoena under this 
section within the time period during which such party could serve a 
discovery request under Sec.  263.24(d). The party obtaining the 
document subpoena is responsible for serving it on the subpoenaed 
person and for serving copies on all parties. Document subpoenas may be 
served in any state, territory, or possession of the United States, the 
District of Columbia, or as otherwise provided by law.
    (3) The administrative law judge shall promptly issue any document 
subpoena requested pursuant to this section. If the administrative law 
judge determines that the application does not set forth a valid basis 
for the issuance of the subpoena, or that any of its terms are 
unreasonable, oppressive, excessive in scope, or unduly burdensome, he 
or she may refuse to issue the subpoena or may issue it in a modified 
form upon such conditions as may be consistent with the Uniform Rules.
    (b) Motion to quash or modify. (1) Any person to whom a document 
subpoena is directed may file a motion to quash or modify such 
subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant shall serve the motion on all 
parties, and any party may respond to such motion within ten days of 
service of the motion.
    (2) Any motion to quash or modify a document subpoena must be filed 
on the same basis, including the assertion of privilege, upon which a 
party could object to a discovery request under Sec.  263.25(d), and 
during the same time limits during which such an objection could be 
filed.
    (c) Enforcing document subpoenas. If a subpoenaed person fails to 
comply with any subpoena issued pursuant to this section or any order 
of the administrative law judge which directs compliance with all or 
any portion of a document subpoena, the subpoenaing party or any other 
aggrieved party may, to the extent authorized by applicable law, apply 
to an appropriate United States district court for an order requiring 
compliance with so much of the document subpoena as the administrative 
law judge has not quashed or modified. A party's right to seek court 
enforcement of a document subpoena shall in no way limit the sanctions 
that may be imposed by the administrative law judge on a party who 
induces a failure to comply with subpoenas issued under this section.


Sec.  263.27  Deposition of witness unavailable for hearing.

    (a) General rules. (1) If a witness will not be available for the 
hearing, a party desiring to preserve that witness's testimony for the 
record may apply in accordance with the procedures set forth in 
paragraph (a)(2) of this section, to the administrative law judge for 
the issuance of a subpoena, including a subpoena duces tecum, requiring 
the attendance of the witness at a deposition. The administrative law 
judge may issue a deposition subpoena under this section upon a showing 
that:
    (i) The witness will be unable to attend or may be prevented from 
attending the hearing because of age, sickness or infirmity, or will 
otherwise be unavailable;
    (ii) The witness's unavailability was not procured or caused by the 
subpoenaing party;
    (iii) The testimony is reasonably expected to be material; and
    (iv) Taking the deposition will not result in any undue burden to 
any other party and will not cause undue delay of the proceeding.
    (2) The application must contain a proposed deposition subpoena and 
a brief statement of the reasons for the issuance of the subpoena. The 
subpoena must name the witness whose deposition is to be taken and 
specify the time and place for taking the deposition. A deposition 
subpoena may require the witness to be deposed at any place within the 
country in which that witness resides or has a regular place of 
employment or such other convenient place as the administrative law 
judge shall fix.
    (3) Any requested subpoena that sets forth a valid basis for its 
issuance must be promptly issued, unless the administrative law judge 
on his or her own motion, requires a written response or requires 
attendance at a conference concerning whether the requested subpoena 
should be issued.
    (4) The party obtaining a deposition subpoena is responsible for 
serving it on the witness and for serving copies on all parties. Unless 
the administrative law judge orders otherwise, no deposition under this 
section shall be taken on fewer than ten days' notice to the witness 
and all parties. Deposition subpoenas may be served in any state, 
territory, possession of the United States, or the District of 
Columbia, on any person or company doing business in any state, 
territory, possession of the United States, or the District of 
Columbia, or as otherwise permitted by law.
    (b) Objections to deposition subpoenas. (1) The witness and any 
party who has not had an opportunity to oppose a deposition subpoena 
issued under this section may file a motion with the administrative law 
judge to quash or modify the subpoena prior to the time for compliance 
specified in the subpoena, but not more than ten days after service of 
the subpoena.
    (2) A statement of the basis for the motion to quash or modify a 
subpoena issued under this section must accompany the motion. The 
motion must be served on all parties.
    (c) Procedure upon deposition. (1) Each witness testifying pursuant 
to a deposition subpoena must be duly sworn, and each party shall have 
the right to examine the witness. Objections to questions or documents 
must be in short form, stating the grounds for the objection. Failure 
to object to questions or documents is not deemed a waiver except where 
the ground for the objection might have been avoided if the objection 
had been timely presented. All questions, answers, and objections must 
be recorded.
    (2) Any party may move before the administrative law judge for an 
order compelling the witness to answer any questions the witness has 
refused to answer or submit any evidence the witness has refused to 
submit during the deposition.
    (3) The deposition must be subscribed by the witness, unless the 
parties and the witness, by stipulation, have waived the signing, or 
the witness is ill, cannot be found, or has refused to sign. If the 
deposition is not subscribed by the witness, the court reporter taking 
the deposition shall certify that the transcript is a true and complete 
transcript of the deposition.
    (d) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any order of the administrative law judge which directs compliance 
with all or any portion of a deposition subpoena under paragraph (b) or 
(c)(3) of this section, the subpoenaing party or other aggrieved party 
may, to the extent authorized by applicable law, apply to

[[Page 89931]]

an appropriate United States district court for an order requiring 
compliance with the portions of the subpoena that the administrative 
law judge has ordered enforced. A party's right to seek court 
enforcement of a deposition subpoena in no way limits the sanctions 
that may be imposed by the administrative law judge on a party who 
fails to comply with, or procures a failure to comply with, a subpoena 
issued under this section.


Sec.  263.28  Interlocutory review.

    (a) General rule. The Board may review a ruling of the 
administrative law judge prior to the certification of the record to 
the Board only in accordance with the procedures set forth in this 
section and Sec.  263.23.
    (b) Scope of review. The Board may exercise interlocutory review of 
a ruling of the administrative law judge if the Board finds that:
    (1) The ruling involves a controlling question of law or policy as 
to which substantial grounds exist for a difference of opinion;
    (2) Immediate review of the ruling may materially advance the 
ultimate termination of the proceeding;
    (3) Subsequent modification of the ruling at the conclusion of the 
proceeding would be an inadequate remedy; or
    (4) Subsequent modification of the ruling would cause unusual delay 
or expense.
    (c) Procedure. Any request for interlocutory review shall be filed 
by a party with the administrative law judge within ten days of his or 
her ruling and shall otherwise comply with Sec.  263.23. Any party may 
file a response to a request for interlocutory review in accordance 
with Sec.  263.23(d). Upon the expiration of the time for filing all 
responses, the administrative law judge shall refer the matter to the 
Board for final disposition.
    (d) Suspension of proceeding. Neither a request for interlocutory 
review nor any disposition of such a request by the Board under this 
section suspends or stays the proceeding unless otherwise ordered by 
the administrative law judge or the Board.


Sec.  263.29  Summary disposition.

    (a) In general. The administrative law judge shall recommend that 
the Board issue a final order granting a motion for summary disposition 
if the undisputed pleaded facts, admissions, affidavits, stipulations, 
documentary evidence, matters as to which official notice may be taken, 
and any other evidentiary materials properly submitted in connection 
with a motion for summary disposition show that:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.
    (b) Filing of motions and responses. (1) Any party who believes 
that there is no genuine issue of material fact to be determined and 
that he or she is entitled to a decision as a matter of law may move at 
any time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 days after service of such a motion, 
or within such time period as allowed by the administrative law judge, 
may file a response to such motion.
    (2) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, investigatory depositions, transcripts, 
affidavits and any other evidentiary materials that the moving party 
contends support his or her position. The motion must also be 
accompanied by a brief containing the points and authorities in support 
of the contention of the moving party. Any party opposing a motion for 
summary disposition must file a statement setting forth those material 
facts as to which he or she contends a genuine dispute exists. Such 
opposition must be supported by evidence of the same type as that 
submitted with the motion for summary disposition and a brief 
containing the points and authorities in support of the contention that 
summary disposition would be inappropriate.
    (c) Hearing on motion. At the request of any party or on his or her 
own motion, the administrative law judge may hear oral argument on the 
motion for summary disposition.
    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the administrative law judge 
shall determine whether the moving party is entitled to summary 
disposition. If the administrative law judge determines that summary 
disposition is warranted, the administrative law judge shall submit a 
recommended decision to that effect to the Board. If the administrative 
law judge finds that no party is entitled to summary disposition, he or 
she shall make a ruling denying the motion.


Sec.  263.30  Partial summary disposition.

    If the administrative law judge determines that a party is entitled 
to summary disposition as to certain claims only, he or she shall defer 
submitting a recommended decision as to those claims. A hearing on the 
remaining issues must be ordered. Those claims for which the 
administrative law judge has determined that summary disposition is 
warranted will be addressed in the recommended decision filed at the 
conclusion of the hearing.


Sec.  263.31  Scheduling and prehearing conferences.

    (a) Scheduling conference. Within 30 days of service of the notice 
or order commencing a proceeding or such other time as parties may 
agree, the administrative law judge shall direct counsel for all 
parties to meet with him or her in person at a specified time and place 
prior to the hearing or to confer by telephone for the purpose of 
scheduling the course and conduct of the proceeding. This meeting or 
telephone conference is called a ``scheduling conference.'' The 
identification of potential witnesses, the time for and manner of 
discovery, and the exchange of any prehearing materials including 
witness lists, statements of issues, stipulations, exhibits and any 
other materials may also be determined at the scheduling conference.
    (b) Prehearing conferences. The administrative law judge may, in 
addition to the scheduling conference, on his or her own motion or at 
the request of any party, direct counsel for the parties to meet with 
him or her (in person or by telephone) at a prehearing conference to 
address any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, 
authenticity and admissibility into evidence of documents;
    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes;
    (7) Amendments to pleadings; and
    (8) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (c) Transcript. The administrative law judge, in his or her 
discretion, may require that a scheduling or prehearing conference be 
recorded by a court reporter. A transcript of the conference and any 
materials filed, including orders, becomes part of the record of the

[[Page 89932]]

proceeding. A party may obtain a copy of the transcript at his or her 
expense.
    (d) Scheduling or prehearing orders. At or within a reasonable time 
following the conclusion of the scheduling conference or any prehearing 
conference, the administrative law judge shall serve on each party an 
order setting forth any agreements reached and any procedural 
determinations made.


Sec.  263.32  Prehearing submissions.

    (a) Within the time set by the administrative law judge, but in no 
case later than 14 days before the start of the hearing, each party 
shall serve on every other party, his or her:
    (1) Prehearing statement;
    (2) Final list of witnesses to be called to testify at the hearing, 
including name and address of each witness and a short summary of the 
expected testimony of each witness;
    (3) List of the exhibits to be introduced at the hearing along with 
a copy of each exhibit; and
    (4) Stipulations of fact, if any.
    (b) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraph (a) of 
this section, except for good cause shown.


Sec.  263.33  Public hearings.

    (a) General rule. All hearings shall be open to the public, unless 
the Board, in the Board's discretion, determines that holding an open 
hearing would be contrary to the public interest. Within 20 days of 
service of the notice or, in the case of change-in-control proceedings 
under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), within 20 
days from service of the hearing order, any respondent may file with 
the Board a request for a private hearing, and any party may file a 
reply to such a request. A party must serve on the administrative law 
judge a copy of any request or reply the party files with the Board. 
The form of, and procedure for, these requests and replies are governed 
by Sec.  263.23. A party's failure to file a request or a reply 
constitutes a waiver of any objections regarding whether the hearing 
will be public or private.
    (b) Filing document under seal. Enforcement Counsel, in his or her 
discretion, may file any document or part of a document under seal if 
disclosure of the document would be contrary to the public interest. 
The administrative law judge shall take all appropriate steps to 
preserve the confidentiality of such documents or parts thereof, 
including closing portions of the hearing to the public.


Sec.  263.34  Hearing subpoenas.

    (a) Issuance. (1) Upon application of a party showing general 
relevance and reasonableness of scope of the testimony or other 
evidence sought, the administrative law judge may issue a subpoena or a 
subpoena duces tecum requiring the attendance of a witness at the 
hearing or the production of documentary or physical evidence at the 
hearing. The application for a hearing subpoena must also contain a 
proposed subpoena specifying the attendance of a witness or the 
production of evidence from any state, territory, or possession of the 
United States, the District of Columbia, or as otherwise provided by 
law at any designated place where the hearing is being conducted. The 
party making the application shall serve a copy of the application and 
the proposed subpoena on every other party.
    (2) A party may apply for a hearing subpoena at any time before the 
commencement of a hearing. During a hearing, a party may make an 
application for a subpoena orally on the record before the 
administrative law judge.
    (3) The administrative law judge shall promptly issue any hearing 
subpoena requested pursuant to this section. If the administrative law 
judge determines that the application does not set forth a valid basis 
for the issuance of the subpoena, or that any of its terms are 
unreasonable, oppressive, excessive in scope, or unduly burdensome, he 
or she may refuse to issue the subpoena or may issue it in a modified 
form upon any conditions consistent with this subpart. Upon issuance by 
the administrative law judge, the party making the application shall 
serve the subpoena on the person named in the subpoena and on each 
party.
    (b) Motion to quash or modify. (1) Any person to whom a hearing 
subpoena is directed or any party may file a motion to quash or modify 
the subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant must serve the motion on each party 
and on the person named in the subpoena. Any party may respond to the 
motion within ten days of service of the motion.
    (2) Any motion to quash or modify a hearing subpoena must be filed 
prior to the time specified in the subpoena for compliance, but not 
more than ten days after the date of service of the subpoena upon the 
movant.
    (c) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section or any order of the 
administrative law judge which directs compliance with all or any 
portion of a document subpoena, the subpoenaing party or any other 
aggrieved party may seek enforcement of the subpoena pursuant to Sec.  
263.26(c).


Sec.  263.35  Conduct of hearings.

    (a) General rules. (1) Hearings shall be conducted so as to provide 
a fair and expeditious presentation of the relevant disputed issues. 
Each party has the right to present its case or defense by oral and 
documentary evidence and to conduct such cross examination as may be 
required for full disclosure of the facts.
    (2) Order of hearing. Enforcement Counsel shall present its case-
in-chief first, unless otherwise ordered by the administrative law 
judge, or unless otherwise expressly specified by law or regulation. 
Enforcement Counsel shall be the first party to present an opening 
statement and a closing statement, and may make a rebuttal statement 
after the respondent's closing statement. If there are multiple 
respondents, respondents may agree among themselves as to their order 
of presentation of their cases, but if they do not agree the 
administrative law judge shall fix the order.
    (3) Examination of witnesses. Only one counsel for each party may 
conduct an examination of a witness, except that in the case of 
extensive direct examination, the administrative law judge may permit 
more than one counsel for the party presenting the witness to conduct 
the examination. A party may have one counsel conduct the direct 
examination and another counsel conduct re-direct examination of a 
witness, or may have one counsel conduct the cross examination of a 
witness and another counsel conduct the re-cross examination of a 
witness.
    (4) Stipulations. Unless the administrative law judge directs 
otherwise, all stipulations of fact and law previously agreed upon by 
the parties, and all documents, the admissibility of which have been 
previously stipulated, will be admitted into evidence upon commencement 
of the hearing.
    (b) Transcript. The hearing must be recorded and transcribed. The 
reporter will make the transcript available to any party upon payment 
by that party to the reporter of the cost of the transcript. The 
administrative law judge may order the record corrected, either upon 
motion to correct, upon stipulation of the parties, or following notice 
to the parties upon the administrative law judge's own motion.

[[Page 89933]]

Sec.  263.36  Evidence.

    (a) Admissibility. (1) Except as is otherwise set forth in this 
section, relevant, material, and reliable evidence that is not unduly 
repetitive is admissible to the fullest extent authorized by the 
Administrative Procedure Act and other applicable law.
    (2) Evidence that would be admissible under the Federal Rules of 
Evidence is admissible in a proceeding conducted pursuant to this 
subpart.
    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence may not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant, 
material, reliable and not unduly repetitive.
    (b) Official notice. (1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court and any material information in the official public 
records of any Federal or state government agency.
    (2) All matters officially noticed by the administrative law judge 
or Board shall appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, shall be afforded an opportunity to 
object.
    (c) Documents. (1) A duplicate copy of a document is admissible to 
the same extent as the original, unless a genuine issue is raised as to 
whether the copy is in some material respect not a true and legible 
copy of the original.
    (2) Subject to the requirements of paragraph (a) of this section, 
any document, including a report of examination, supervisory activity, 
inspection or visitation, prepared by an appropriate Federal financial 
institutions regulatory agency or state regulatory agency, is 
admissible either with or without a sponsoring witness.
    (3) Witnesses may use existing or newly created charts, exhibits, 
calendars, calculations, outlines or other graphic material to 
summarize, illustrate, or simplify the presentation of testimony. Such 
materials may, subject to the administrative law judge's discretion, be 
used with or without being admitted into evidence.
    (d) Objections. (1) Objections to the admissibility of evidence 
must be timely made and rulings on all objections must appear on the 
record.
    (2) When an objection to a question or line of questioning 
propounded to a witness is sustained, the examining counsel may make a 
specific proffer on the record of what he or she expected to prove by 
the expected testimony of the witness, either by representation of 
counsel or by direct interrogation of the witness.
    (3) The administrative law judge shall retain rejected exhibits, 
adequately marked for identification, for the record, and transmit such 
exhibits to the Board.
    (4) Failure to object to admission of evidence or to any ruling 
constitutes a waiver of the objection.
    (e) Stipulations. The parties may stipulate as to any relevant 
matters of fact or the authentication of any relevant documents. Such 
stipulations must be received in evidence at a hearing, and are binding 
on the parties with respect to the matters therein stipulated.
    (f) Depositions of unavailable witnesses. (1) If a witness is 
unavailable to testify at a hearing, and that witness has testified in 
a deposition to which all parties in a proceeding had notice and an 
opportunity to participate, a party may offer as evidence all or any 
part of the transcript of the deposition, including deposition 
exhibits, if any.
    (2) Such deposition transcript is admissible to the same extent 
that testimony would have been admissible had that person testified at 
the hearing, provided that if a witness refused to answer proper 
questions during the depositions, the administrative law judge may, on 
that basis, limit the admissibility of the deposition in any manner 
that justice requires.
    (3) Only those portions of a deposition received in evidence at the 
hearing constitute a part of the record.


Sec.  263.37  Post-hearing filings.

    (a) Proposed findings and conclusions and supporting briefs. (1) 
Using the same method of service for each party, the administrative law 
judge shall serve notice upon each party, that the certified 
transcript, together with all hearing exhibits and exhibits introduced 
but not admitted into evidence at the hearing, has been filed. Any 
party may file with the administrative law judge proposed findings of 
fact, proposed conclusions of law, and a proposed order within 30 days 
following service of this notice by the administrative law judge or 
within such longer period as may be ordered by the administrative law 
judge.
    (2) Proposed findings and conclusions must be supported by citation 
to any relevant authorities and by page references to any relevant 
portions of the record. A post-hearing brief may be filed in support of 
proposed findings and conclusions, either as part of the same document 
or in a separate document. Any party who fails to file timely with the 
administrative law judge any proposed finding or conclusion is deemed 
to have waived the right to raise in any subsequent filing or 
submission any issue not addressed in such party's proposed finding or 
conclusion.
    (b) Reply briefs. Reply briefs may be filed within 15 days after 
the date on which the parties' proposed findings, conclusions, and 
order are due. Reply briefs must be strictly limited to responding to 
new matters, issues, or arguments raised in another party's papers. A 
party who has not filed proposed findings of fact and conclusions of 
law or a post-hearing brief may not file a reply brief.
    (c) Simultaneous filing required. The administrative law judge 
shall not order the filing by any party of any brief or reply brief in 
advance of the other party's filing of its brief.


Sec.  263.38  Recommended decision and filing of record.

    (a) Filing of recommended decision and record. Within 45 days after 
expiration of the time allowed for filing reply briefs under Sec.  
263.37(b), the administrative law judge shall file with and certify to 
the Board, for decision, the record of the proceeding. The record must 
include the administrative law judge's recommended decision, 
recommended findings of fact, recommended conclusions of law, and 
proposed order; all prehearing and hearing transcripts, exhibits, and 
rulings; and the motions, briefs, memoranda, and other supporting 
papers filed in connection with the hearing. The administrative law 
judge shall serve upon each party the recommended decision, findings, 
conclusions, and proposed order.
    (b) Filing of index. At the same time the administrative law judge 
files with and certifies to the Board for final determination the 
record of the proceeding, the administrative law judge shall furnish to 
the Board a certified index of the entire record of the proceeding. The 
certified index shall include, at a minimum, an entry for each paper, 
document or motion filed with the administrative law judge in the 
proceeding, the date of the filing, and the identity of the filer. The 
certified index shall also include an exhibit index containing, at a 
minimum, an entry consisting of exhibit number and title or description 
for: Each exhibit introduced and admitted into evidence at the hearing; 
each exhibit introduced but not admitted into evidence at the hearing; 
each exhibit introduced and admitted into evidence after the completion 
of the hearing; and each exhibit introduced but not admitted into 
evidence after the completion of the hearing.

[[Page 89934]]

Sec.  263.39  Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  263.38, a party may file with the Board written exceptions to the 
administrative law judge's recommended decision, findings, conclusions 
or proposed order, to the admission or exclusion of evidence, or to the 
failure of the administrative law judge to make a ruling proposed by a 
party. A supporting brief may be filed at the time the exceptions are 
filed, either as part of the same document or in a separate document.
    (b) Effect of failure to file or raise exceptions. (1) Failure of a 
party to file exceptions to those matters specified in paragraph (a) of 
this section within the time prescribed is deemed a waiver of objection 
thereto.
    (2) No exception need be considered by the Board if the party 
taking exception had an opportunity to raise the same objection, issue, 
or argument before the administrative law judge and failed to do so.
    (c) Contents. (1) All exceptions and briefs in support of such 
exceptions must be confined to the particular matters in, or omissions 
from, the administrative law judge's recommendations to which that 
party takes exception.
    (2) All exceptions and briefs in support of exceptions must set 
forth page or paragraph references to the specific parts of the 
administrative law judge's recommendations to which exception is taken, 
the page or paragraph references to those portions of the record relied 
upon to support each exception, and the legal authority relied upon to 
support each exception.


Sec.  263.40  Review by the Board.

    (a) Notice of submission to the Board. When the Board determines 
that the record in the proceeding is complete, the Board shall serve 
notice upon the parties that the proceeding has been submitted to the 
Board for final decision.
    (b) Oral argument before the Board. Upon the initiative of the 
Board or on the written request of any party filed with the Board 
within the time for filing exceptions, the Board may order and hear 
oral argument on the recommended findings, conclusions, decision, and 
order of the administrative law judge. A written request by a party 
must show good cause for oral argument and state reasons why arguments 
cannot be presented adequately in writing. A denial of a request for 
oral argument may be set forth in the Board's final decision. Oral 
argument before the Board must be on the record.
    (c) Agency final decision. (1) Decisional employees may advise and 
assist the Board in the consideration and disposition of the case. The 
final decision of the Board will be based upon review of the entire 
record of the proceeding, except that the Board may limit the issues to 
be reviewed to those findings and conclusions to which opposing 
arguments or exceptions have been filed by the parties.
    (2) The Board shall render a final decision within 90 days after 
notification of the parties that the case has been submitted for final 
decision, or 90 days after oral argument, whichever is later, unless 
the Board orders that the action or any aspect thereof be remanded to 
the administrative law judge for further proceedings. Copies of the 
final decision and order of the Board shall be served upon each party 
to the proceeding, upon other persons required by statute, and, if 
directed by the Board or required by statute, upon any appropriate 
state or Federal supervisory authority.


Sec.  263.41  Stays pending judicial review.

    The commencement of proceedings for judicial review of a final 
decision and order of the Board may not, unless specifically ordered by 
the Board or a reviewing court, operate as a stay of any order issued 
by the Board. The Board may, in its discretion, and on such terms as it 
finds just, stay the effectiveness of all or any part of its order 
pending a final decision on a petition for review of that order.

Subpart B--Board Local Rules Supplementing the Uniform Rules


Sec.  263.50  Purpose and scope.

    (a) This subpart prescribes the rules of practice and procedure 
governing formal adjudications set forth in Sec.  263.50(b) of this 
subpart, and supplements the rules of practice and procedure contained 
in subpart A of this part.
    (b) The rules and procedures of this subpart and subpart A of this 
part shall apply to the formal adjudications set forth in Sec.  263.1 
of subpart A and to the following adjudications:
    (1) Suspension of a member bank from use of credit facilities of 
the Federal Reserve System under section 4 of the FRA (12 U.S.C. 301);
    (2) Termination of a bank's membership in the Federal Reserve 
System under section 9 of the FRA (12 U.S.C. 327);
    (3) Issuance of a cease-and-desist order under section 11 of the 
Clayton Act (15 U.S.C. 21);
    (4) Adjudications under sections 2, 3, or 4 of the BHC Act (12 
U.S.C. 1841, 1842, or 1843);
    (5) Formal adjudications on bank merger applications under section 
18(c) of the FDIA (12 U.S.C. 1828(c));
    (6) Issuance of a divestiture order under section 5(e) of the BHC 
Act (12 U.S.C. 1844(e));
    (7) Imposition of sanctions upon any municipal securities dealer 
for which the Board is the appropriate regulatory agency, or upon any 
person associated or seeking to become associated with such a municipal 
securities dealer, under section 15B(c)(5) of the Exchange Act (15 
U.S.C. 78o-4);
    (8) Proceedings where the Board otherwise orders that a formal 
hearing be held;
    (9) Termination of the activities of a state branch, state agency, 
or commercial lending company subsidiary of a foreign bank in the 
United States, pursuant to section 7(e) of the IBA (12 U.S.C. 3105(d));
    (10) Termination of the activities of a representative office of a 
foreign bank in the United States, pursuant to section 10(b) of the IBA 
(12 U.S.C. 3107(b));
    (11) Issuance of a prompt corrective action directive to a member 
bank under section 38 of the FDI Act (12 U.S.C. 1831o);
    (12) Reclassification of a member bank on grounds of unsafe or 
unsound condition under section 38(g)(1) of the FDI Act (12 U.S.C. 
1831o(g)(1));
    (13) Reclassification of a member bank on grounds of unsafe and 
unsound practice under section 38(g)(1) of the FDI Act (12 U.S.C. 
1831o(g)(1));
    (14) Issuance of an order requiring a member bank to dismiss a 
director or senior executive officer under section 38 (e)(5) and 
38(f)(2) (F)(ii) of the FDI Act (12 U.S.C. 1831o(e)(5) and 1831o(f)(2) 
(F)(ii));
    (15) Adjudications under section 10 of the HOLA (12 U.S.C. 1467a).


Sec.  263.51  Definitions.

    As used in subparts B through G of this part:
    (a) Secretary means the Secretary of the Board of Governors of the 
Federal Reserve System;
    (b) Member bank means any bank that is a member of the Federal 
Reserve System.
    (c) Institution has the same meaning as that assigned to it in 
Sec.  263.3(f) of subpart A, and includes any foreign bank with a 
representative office in the United States.

[[Page 89935]]

Sec.  263.52  Address for filing.

    All papers to be filed with the Board shall be filed with the 
Secretary of the Board of Governors of the Federal Reserve System, 
Washington, DC 20551.


Sec.  263.53  Discovery depositions.

    (a) In general. In addition to the discovery permitted in subpart A 
of this part, limited discovery by means of depositions shall be 
allowed for individuals with knowledge of facts material to the 
proceeding that are not protected from discovery by any applicable 
privilege, and of identified expert witnesses. Except in unusual cases, 
accordingly, depositions will be permitted only of individuals 
identified as hearing witnesses, including experts. All discovery 
depositions must be completed within the time set forth in Sec.  
263.24(d).
    (b) Application. A party who desires to take a deposition of any 
other party's proposed witnesses, shall apply to the administrative law 
judge for the issuance of a deposition subpoena or subpoena duces 
tecum. The application shall state the name and address of the proposed 
deponent, the subject matter of the testimony expected from the 
deponent and its relevancy to the proceeding, and the address of the 
place and the time, no sooner than ten days after the service of the 
subpoena, for the taking of the deposition. Any such application shall 
be treated as a motion subject to the rules governing motions practice 
set forth in Sec.  263.23.
    (c) Issuance of subpoena. The administrative law judge shall issue 
the requested deposition subpoena or subpoena duces tecum upon a 
finding that the application satisfies the requirements of this section 
and of Sec.  263.24. If the administrative law judge determines that 
the taking of the deposition or its proposed location is, in whole or 
in part, unnecessary, unreasonable, oppressive, excessive in scope or 
unduly burdensome, he or she may deny the application or may grant it 
upon such conditions as justice may require. The party obtaining the 
deposition subpoena or subpoena duces tecum shall be responsible for 
serving it on the deponent and all parties to the proceeding in 
accordance with Sec.  263.11.
    (d) Motion to quash or modify. A person named in a deposition 
subpoena or subpoena duces tecum may file a motion to quash or modify 
the subpoena or for the issuance of a protective order. Such motions 
must be filed within ten days following service of the subpoena, but in 
all cases at least five days prior to the commencement of the scheduled 
deposition. The motion must be accompanied by a statement of the 
reasons for granting the motion and a copy of the motion and the 
statement must be served on the party which requested the subpoena. 
Only the party requesting the subpoena may file a response to a motion 
to quash or modify, and any such response shall be filed within five 
days following service of the motion.
    (e) Enforcement of a deposition subpoena. Enforcement of a 
deposition subpoena shall be in accordance with the procedures set 
forth in Sec.  263.27(d).
    (f) Conduct of the deposition. The deponent shall be duly sworn, 
and each party shall have the right to examine the deponent with 
respect to all non-privileged, relevant and material matters. 
Objections to questions or evidence shall be in the short form, stating 
the ground for the objection. Failure to object to questions or 
evidence shall not be deemed a waiver except where the grounds for the 
objection might have been avoided if the objection had been timely 
presented. The discovery deposition shall be transcribed or otherwise 
recorded as agreed among the parties.
    (g) Protective orders. At any time during the taking of a discovery 
deposition, on the motion of any party or of the deponent, the 
administrative law judge may terminate or limit the scope and manner of 
the deposition upon a finding that grounds exist for such relief. 
Grounds for terminating or limiting the taking of a discovery 
deposition include a finding that the discovery deposition is being 
conducted in bad faith or in such a manner as to:
    (1) Unreasonably annoy, embarrass, or oppress the deponent;
    (2) Unreasonably probe into privilege, irrelevant or immaterial 
matters; or
    (3) Unreasonably attempt to pry into a party's preparation for 
trial.


Sec.  263.54  Delegation to the Office of Financial Institution 
Adjudication.

    Unless otherwise ordered by the Board, administrative adjudications 
subject to subpart A of this part shall be conducted by an 
administrative law judge of OFIA.


Sec.  263.55  Board as Presiding Officer.

    The Board may, in its discretion, designate itself, one or more of 
its members, or an authorized officer, to act as presiding officer in a 
formal hearing. In such a proceeding, proposed findings and 
conclusions, briefs, and other submissions by the parties permitted in 
subpart A shall be filed with the Secretary for consideration by the 
Board. Sections 263.38 and 263.39 of subpart A will not apply to 
proceedings conducted under this section.


Sec.  263.56  Initial licensing proceedings.

    Proceedings with respect to applications for initial licenses shall 
include, but not be limited to, applications for Board approval under 
section 3 of the BHC Act and section 10 of HOLA and such proceedings as 
may be ordered by the Board with respect to applications under section 
18(c) of the FDIA. In such initial licensing proceedings, the 
procedures set forth in subpart A of this part shall apply, except that 
the Board may designate a Board Counsel to represent the Board in a 
nonadversary capacity for the purpose of developing for the record 
information relevant to the issues to be determined by the Presiding 
Officer and the Board. In such proceedings, Board Counsel shall be 
considered to be a decisional employee for purposes of Sec. Sec.  263.9 
and 263.40 of subpart A.

FEDERAL DEPOSIT INSURANCE CORPORATION

    For the reasons set out in the joint preamble, the FDIC amends 12 
CFR part 308 as follows.

0
23. The authority section for part 308 continues to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 
1829, 1829(b), 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b), 
1972, 3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15 
U.S.C. 78(h) and (i), 78o(c)(4), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 
78u-2, 78u-3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 
U.S.C. 330, 5321; 42 U.S.C. 4012a; Pub. L. 104-134, sec. 31001(s), 
110 Stat. 1321; Pub. L. 109-351, 120 Stat. 1966; Pub. L. 111-203, 
124 Stat. 1376; Pub. L. 114-74, sec. 701, 129 Stat. 584.

0
24. Subparts A and B are revised to read as follows:
Subpart A--Uniform Rules of Practice and Procedure
Sec.
308.0 Applicability date.
308.1 Scope.
308.2 Rules of construction.
308.3 Definitions.
308.4 Authority of the Board of Directors.
308.5 Authority of the administrative law judge (ALJ).
308.6 Appearance and practice in adjudicatory proceedings.
308.7 Good faith certification.
308.8 Conflicts of interest.
308.9 Ex parte communications.
308.10 Filing of papers.
308.11 Service of papers.
308.12 Construction of time limits.
308.13 Change of time limits.
308.14 Witness fees and expenses.
308.15 Opportunity for informal settlement.
308.16 FDIC's right to conduct examination.
308.17 Collateral attacks on adjudicatory proceeding.

[[Page 89936]]

308.18 Commencement of proceeding and contents of notice.
308.19 Answer.
308.20 Amended pleadings.
308.21 Failure to appear.
308.22 Consolidation and severance of actions.
308.23 Motions.
308.24 Scope of document discovery.
308.25 Request for document discovery from parties.
308.26 Document subpoenas to nonparties.
308.27 Deposition of witness unavailable for hearing.
308.28 Interlocutory review.
308.29 Summary disposition.
308.30 Partial summary disposition.
308.31 Scheduling and prehearing conferences.
308.32 Prehearing submissions.
308.33 Public hearings.
308.34 Hearing subpoenas.
308.35 Conduct of hearings.
308.36 Evidence.
308.37 Post-hearing filings.
308.38 Recommended decision and filing of record.
308.39 Exceptions to recommended decision.
308.40 Review by the Board of Directors.
308.41 Stays pending judicial review.
Subpart B--General Rules of Procedure
308.100 Applicability date.
308.101 Scope of Local Rules.
308.102 Authority of Board of Directors and Administrative Officer.
308.103 Assignment of Administrative Law Judge (ALJ).
308.104 Filings with the Board of Directors.
308.105 Custodian of the record.
308.106 Written testimony in lieu of oral hearing.
308.107 Supplemental discovery rules.

Subpart A--Uniform Rules of Practice and Procedure


Sec.  308.0  Applicability date.

    These Uniform Rules set out in this subpart apply to adjudicatory 
proceedings initiated on or after April 1, 2024. Any adjudicatory 
proceedings initiated before April 1, 2024, continue to be governed by 
the previous version of the Uniform Rules included in appendix A of 
this part.


Sec.  308.1  Scope.

    This subpart prescribes Uniform Rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record after opportunity for a hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal 
Deposit Insurance Act (FDIA) (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the Federal Deposit 
Insurance Corporation (FDIC) should issue an order to approve or 
disapprove a person's proposed acquisition of an institution;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (Exchange Act) (15 U.S.C. 78o-5), to impose sanctions upon 
any Government securities broker or dealer or upon any person 
associated or seeking to become associated with a Government securities 
broker or dealer for which the FDIC is the appropriate agency;
    (e) Assessment of civil money penalties by the FDIC against 
institutions, institution-affiliated parties, and certain other persons 
for which it is the appropriate agency for any violation of:
    (1) Sections 22(h) and 23 of the Federal Reserve Act (FRA), or any 
implementing regulation, and certain unsafe or unsound practices or 
breaches of fiduciary duty under 12 U.S.C. 1828(j) or 12 U.S.C. 1468;
    (2) Section 106(b) of the Bank Holding Company Act Amendments of 
1970 (BHCA Amendments of 1970), and certain unsafe or unsound practices 
or breaches of fiduciary duty under 12 U.S.C. 1972(2)(F);
    (3) Any provision of the Change in Bank Control Act of 1978, as 
amended (CBCA), or any implementing regulation or order issued, and 
certain unsafe or unsound practices, or breaches of fiduciary duty 
under 12 U.S.C. 1817(j)(16);
    (4) Section 7(a)(1) of the FDIA under 12 U.S.C. 1817(a)(1);
    (5) Any provision of the International Lending Supervision Act of 
1983 (ILSA), or any rule, regulation or order issued under 12 U.S.C. 
3909;
    (6) Any provision of the International Banking Act of 1978 (IBA), 
or any rule, regulation or order issued under 12 U.S.C. 3108;
    (7) Certain provisions of the Exchange Act under section 21B of the 
Exchange Act (15 U.S.C. 78u-2);
    (8) Section 1120 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (FIRREA) (12 U.S.C. 3349), or any order or 
regulation issued under;
    (9) The terms of any final or temporary order issued under section 
8 of the FDIA or of any written agreement executed by the FDIC, or the 
former Office of Thrift Supervision (OTS), the terms of any condition 
imposed in writing by the FDIC in connection with the grant of an 
application or request, certain unsafe or unsound practices or breaches 
of fiduciary duty, or any law or regulation not otherwise provided 
under 12 U.S.C. 1818(i)(2);
    (10) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued under; and
    (11) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued under;
    (12) Certain provisions of Section 5 of the Home Owners' Loan Act 
(HOLA) or any regulation or order issued under 12 U.S.C. 1464(d)(1), 
(5)-(8), (s), and (v);
    (13) Section 9 of the HOLA or any regulation or order issued under 
12 U.S.C. 1467(d); and
    (14) Section 10 of HOLA under 12 U.S.C. 1467a(a)(2)(D), (g), 
(i)(2)-(4) and (r);
    (f) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g));
    (g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k)) 
to impose penalties for violations of the post-employment restrictions 
under section 10(k); and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules (see Sec.  308.3(n)).


Sec.  308.2  Rules of construction.

    For purposes of this part:
    (a) Any term in the singular includes the plural, and the plural 
includes the singular, if such use would be appropriate;
    (b) The term counsel includes a non-attorney representative; and
    (c) Unless the context requires otherwise, a party's counsel of 
record, if any, may, on behalf of that party, take any action required 
to be taken by the party.


Sec.  308.3  Definitions.

    For purposes of this subpart, unless explicitly stated to the 
contrary:
    (a) Administrative law judge (ALJ) means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Administrative Officer means an inferior officer of the Federal 
Deposit Insurance Corporation (FDIC), duly appointed by the Board of 
Directors of the FDIC to serve as the Board's designee to hear certain 
motions or requests in an adjudicatory proceeding and to be the 
official custodian of the record for the FDIC.
    (c) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.

[[Page 89937]]

    (d) Assistant Administrative Officer means an inferior officer of 
the FDIC, duly appointed by the Board of Directors of the FDIC to serve 
as the Board's designee to hear certain motions or requests in an 
adjudicatory proceeding upon the designation or unavailability of the 
Administrative Officer.
    (e) Board of Directors or Board means the Board of Directors of the 
FDIC or its designee.
    (f) Decisional employee means any member of the FDIC's or ALJ's 
staff who has not engaged in an investigative or prosecutorial role in 
a proceeding and who may assist the Board of Directors, ALJ or the 
Administrative Officer, in preparing orders, recommended decisions, 
decisions, and other documents under the Uniform Rules.
    (g) Designee of the Board of Directors means officers or officials 
of the FDIC acting pursuant to authority delegated by the Board of 
Directors.
    (h) Electronic signature means affixing the equivalent of a 
signature to an electronic document filed or transmitted 
electronically.
    (i) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the FDIC in an adjudicatory 
proceeding.
    (j) FDIC means the Federal Deposit Insurance Corporation.
    (k) Final order means an order issued by the FDIC with or without 
the consent of the affected institution or the institution-affiliated 
party that has become final, without regard to the pendency of any 
petition for reconsideration or review.
    (l) Institution includes:
    (1) Any bank as that term is defined in section 3(a) of the FDIA 
(12 U.S.C. 1813(a));
    (2) Any bank holding company or any subsidiary (other than a bank) 
of a bank holding company as those terms are defined in the BHCA (12 
U.S.C. 1841 et seq.);
    (3) Any savings association as that term is defined in section 3(b) 
of the FDIA (12 U.S.C. 1813(b)), any savings and loan holding company 
or any subsidiary thereof (other than a bank) as those terms are 
defined in section 10(a) of the HOLA (12 U.S.C. 1467a(a));
    (4) Any organization operating under section 25 of the FRA (12 
U.S.C. 601 et seq.);
    (5) Any foreign bank or company to which section 8 of the IBA (12 
U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; 
and
    (6) Any Federal agency as that term is defined in section 1(b) of 
the IBA (12 U.S.C. 3101(5)).
    (m) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 3(u) of the FDIA (12 U.S.C. 
1813(u).
    (n) Local Rules means those rules promulgated by the FDIC in those 
subparts of this part other than this subpart.
    (o) Office of Financial Institution Adjudication (OFIA) means the 
executive body charged with overseeing the administration of 
administrative enforcement proceedings of the Office of the Comptroller 
of the Currency (OCC), the Board of Governors of the Federal Reserve 
Board (Board of Governors), the FDIC, and the National Credit Union 
Administration (NCUA).
    (p) Party means the FDIC and any person named as a party in any 
notice.
    (q) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency, or other entity or organization, including an 
institution as defined in this section.
    (r) Respondent means any party other than the FDIC.
    (s) Uniform Rules means those rules in this subpart A that pertain 
to the types of formal administrative enforcement actions set forth at 
Sec.  308.1, and as specified in subparts B through P of this part.
    (t) Violation means any violation as that term is defined in 
section 3(v) of the FDIA (12 U.S.C. 1813(v)).


Sec.  308.4  Authority of the Board of Directors.

    The Board of Directors may, at any time during the pendency of a 
proceeding, perform, direct the performance of, or waive performance 
of, any act which could be done or ordered by the ALJ.


Sec.  308.5  Authority of the administrative law judge (ALJ).

    (a) General rule. All proceedings governed by this part must be 
conducted in accordance with the provisions of 5 U.S.C. chapter 5. The 
ALJ has all powers necessary to conduct a proceeding in a fair and 
impartial manner and to avoid unnecessary delay.
    (b) Powers. The ALJ has all powers necessary to conduct the 
proceeding in accordance with paragraph (a) of this section, including 
the following powers:
    (1) To administer oaths and affirmations;
    (2) To issue subpoenas, subpoenas duces tecum, protective orders, 
and other orders, as authorized by this part, and to quash or modify 
any such subpoenas and orders;
    (3) To receive relevant evidence and to rule upon the admission of 
evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
subpart;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling and/or pre-hearing conferences as set forth 
in Sec.  308.31;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the Board 
of Directors has the power to grant any motion to dismiss the 
proceeding or to decide any other motion that results in a final 
determination of the merits of the proceeding;
    (8) To prepare and present to the Board of Directors a recommended 
decision as provided in this subpart;
    (9) To recuse oneself by motion made by a party or on the ALJ's own 
motion;
    (10) To establish time, place and manner limitations on the 
attendance of the public and the media for any public hearing; and
    (11) To do all other things necessary and appropriate to discharge 
the duties of an ALJ.


Sec.  308.6  Appearance and practice in adjudicatory proceedings.

    (a) Appearance before the FDIC or an ALJ--(1) By attorneys. Any 
member in good standing of the bar of the highest court of any state, 
commonwealth, possession, territory of the United States, or the 
District of Columbia may represent others before the FDIC if such 
attorney is not currently suspended or debarred from practice before 
the FDIC.
    (2) By non-attorneys. An individual may appear on the individual's 
own behalf.
    (3) Notice of appearance. (i) Any individual acting on the 
individual's own behalf or as counsel on behalf of a party, including 
the FDIC, must file a notice of appearance with OFIA at or before the 
time that the individual submits papers or otherwise appears on behalf 
of a party in the adjudicatory proceeding. The notice of appearance 
must include:
    (A) A written declaration that the individual is currently 
qualified as provided in paragraph (a)(1) or (2) of this section and is 
authorized to represent the particular party; and
    (B) A written acknowledgement that the individual has reviewed and 
will comply with the Uniform Rules and Local Rules in subpart B of this 
part.
    (ii) By filing a notice of appearance on behalf of a party in an 
adjudicatory proceeding, the counsel agrees and represents that the 
counsel is authorized to accept service on behalf of the

[[Page 89938]]

represented party and that, in the event of withdrawal from 
representation, the counsel will, if required by the ALJ, continue to 
accept service until new counsel has filed a notice of appearance or 
until the represented party indicates that the party will proceed on a 
pro se basis.
    (b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or 
contumacious conduct at any phase of any adjudicatory proceeding may be 
grounds for exclusion or suspension of counsel from the proceeding.


Sec.  308.7  Good faith certification.

    (a) General requirement. Every filing or submission of record 
following the issuance of a notice must be signed by at least one 
counsel of record in the counsel's individual name and must state that 
counsel's mailing address, electronic mail address, and telephone 
number. A party who acts as the party's own counsel must sign that 
person's individual name and state that person's mailing address, 
electronic mail address, and telephone number on every filing or 
submission of record. Electronic signatures may be used to satisfy the 
signature requirements of this section.
    (b) Effect of signature. (1) The signature of counsel or a party 
will constitute a certification: the counsel or party has read the 
filing or submission of record; to the best of the counsel's or party's 
knowledge, information, and belief formed after reasonable inquiry, the 
filing or submission of record is well-grounded in fact and is 
warranted by existing law or a good faith argument for the extension, 
modification, or reversal of existing law; and the filing or submission 
of record is not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.
    (2) If a filing or submission of record is not signed, the ALJ will 
strike the filing or submission of record, unless it is signed promptly 
after the omission is called to the attention of the pleader or movant.
    (c) Effect of making oral motion or argument. The act of making any 
oral motion or oral argument by any counsel or party constitutes a 
certification that to the best of the counsel's or party's knowledge, 
information, and belief formed after reasonable inquiry, the counsel's 
or party's statements are well-grounded in fact and are warranted by 
existing law or a good faith argument for the extension, modification, 
or reversal of existing law, and are not made for any improper purpose, 
such as to harass or to cause unnecessary delay or needless increase in 
the cost of litigation.


Sec.  308.8  Conflicts of interest.

    (a) Conflict of interest in representation. No person may appear as 
counsel for another person in an adjudicatory proceeding if it 
reasonably appears that such representation may be materially limited 
by that counsel's responsibilities to a third person or by the 
counsel's own interests. The ALJ may take corrective measures at any 
stage of a proceeding to cure a conflict of interest in representation, 
including the issuance of an order limiting the scope of representation 
or disqualifying an individual from appearing in a representative 
capacity for the duration of the proceeding.
    (b) Certification and waiver. If any person appearing as counsel 
represents two or more parties to an adjudicatory proceeding or also 
represents a non-party on a matter relevant to an issue in the 
proceeding, counsel must certify in writing at the time of filing the 
notice of appearance required by Sec.  308.6(a):
    (1) That the counsel has personally and fully discussed the 
possibility of conflicts of interest with each such party and non-
party; and
    (2) That each such party and non-party waives any right it might 
otherwise have had to assert any known conflicts of interest or to 
assert any non-material conflicts of interest during the course of the 
proceeding.


Sec.  308.9  Ex parte communications.

    (a) Definition--(1) Ex parte communication means any material oral 
or written communication relevant to the merits of an adjudicatory 
proceeding that was neither on the record nor on reasonable prior 
notice to all parties that takes place between:
    (i) An interested person outside the FDIC (including such person's 
counsel); and
    (ii) The ALJ handling that proceeding, the Board of Directors, or a 
decisional employee.
    (2) Exception. A request for status of the proceeding does not 
constitute an ex parte communication.
    (b) Prohibition of ex parte communications. From the time the 
notice is issued by the FDIC until the date that the Board of Directors 
issues a final decision pursuant to Sec.  308.40(c):
    (1) An interested person outside the FDIC must not make or 
knowingly cause to be made an ex parte communication to any member of 
the Board of Directors, the ALJ, or a decisional employee; and
    (2) Any member of the Board of Directors, ALJ, or decisional 
employee may not make or knowingly cause to be made to any interested 
person outside the FDIC any ex parte communication.
    (c) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the ALJ, any member of the Board of 
Directors, or any other person identified in paragraph (a) of this 
section, that person will cause all such written communications (or, if 
the communication is oral, a memorandum stating the substance of the 
communication) to be placed on the record of the proceeding and served 
on all parties. All other parties to the proceeding may, within ten 
days of service of the ex parte communication, file responses thereto 
and to recommend any sanctions that they believe to be appropriate 
under the circumstances. The ALJ or the Board of Directors then 
determines whether any action should be taken concerning the ex parte 
communication in accordance with paragraph (d) of this section.
    (d) Sanctions. Any party or counsel to a party who makes a 
prohibited ex parte communication, or who encourages or solicits 
another to make any such communication, may be subject to any 
appropriate sanction or sanctions imposed by the Board of Directors or 
the ALJ including, but not limited to, exclusion from the proceedings 
and an adverse ruling on the issue which is the subject of the 
prohibited communication.
    (e) Separation of functions--(1) In general. Except to the extent 
required for the disposition of ex parte matters as authorized by law, 
the ALJ may not:
    (i) Consult a person or party on a fact in issue unless on notice 
and opportunity for all parties to participate; or
    (ii) Be responsible to or subject to the supervision or direction 
of an employee or agent engaged in the performance of investigative or 
prosecuting functions for the FDIC.
    (2) Decision process. An employee or agent engaged in the 
performance of investigative or prosecuting functions for the FDIC in a 
case may not, in that or a factually related case, participate or 
advise in the decision, recommended decision, or agency review of the 
recommended decision under Sec.  308.40, except as witness or counsel 
in administrative or judicial proceedings.


Sec.  308.10  Filing of papers.

    (a) Filing. Any papers required to be filed, excluding documents 
produced in response to a discovery request pursuant to Sec. Sec.  
308.25 and 308.26, must be filed with OFIA, except as otherwise 
provided.

[[Page 89939]]

    (b) Manner of filing. Unless otherwise specified by the Board of 
Directors or the ALJ, filing may be accomplished by:
    (1) Electronic mail or other electronic means designated by the 
Board of Directors or the ALJ;
    (2) Personal service;
    (3) Delivering the papers to a same day courier service or 
overnight delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) Formal requirements as to papers filed--(1) Form. All papers 
filed must set forth the name, mailing address, electronic mail 
address, and telephone number of the counsel or party making the filing 
and must be accompanied by a certification setting forth when and how 
service has been made on all other parties. All papers filed must be 
double-spaced and printed or typewritten on an 8 1/2x11 inch page and 
must be clear and legible.
    (2) Signature. All papers must be dated and signed as provided in 
Sec.  308.7.
    (3) Caption. All papers filed must include at the head thereof, or 
on a title page, the name of the FDIC and of the filing party, the 
title and docket number of the proceeding, and the subject of the 
particular paper.


Sec.  308.11  Service of papers.

    (a) By the parties. Except as otherwise provided, a party filing 
papers must serve a copy upon the counsel of record for all other 
parties to the proceeding so represented, and upon any party not so 
represented.
    (b) Method of service. Except as provided in paragraphs (c)(2) and 
(d) of this section, a serving party must use one of the following 
methods of service:
    (1) Electronic mail or other electronic means;
    (2) Personal service;
    (3) Delivering the papers by same day courier service or overnight 
delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) By the Board of Directors or the ALJ. (1) All papers required 
to be served by the Board of Directors or the ALJ upon a party who has 
appeared in the proceeding in accordance with Sec.  308.6 will be 
served by electronic mail or other electronic means designated by the 
Board of Directors or ALJ.
    (2) If a respondent has not appeared in the proceeding in 
accordance with Sec.  308.6, the Board of Directors or the ALJ will 
serve the respondent by any of the following methods:
    (i) By personal service;
    (ii) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (iii) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
respondent;
    (iv) By registered or certified mail, delivery by a same day 
courier service, or by an overnight delivery service to the 
respondent's last known mailing address; or
    (v) By any other method reasonably calculated to give actual 
notice.
    (d) Subpoenas. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (3) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
party;
    (4) By registered or certified mail, delivery by a same day courier 
service, or by an overnight delivery service to the person's last known 
mailing address; or
    (5) By any other method reasonably calculated to give actual 
notice.
    (e) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing is held, provided that if service is made on a 
foreign bank in connection with an action or proceeding involving one 
or more of its branches or agencies located in any state, territory, 
possession of the United States, or the District of Columbia, service 
must be made on at least one branch or agency so involved.


Sec.  308.12  Construction of time limits.

    (a) General rule. In computing any period of time prescribed by 
this subpart, the date of the act or event that commences the 
designated period of time is not included. The last day so computed is 
included unless it is a Saturday, Sunday, or Federal holiday. When the 
last day is a Saturday, Sunday, or Federal holiday, the period runs 
until the end of the next day that is not a Saturday, Sunday, or 
Federal holiday. Intermediate Saturdays, Sundays, and Federal holidays 
are included in the computation of time. However, when the time period 
within which an act is to be performed is ten days or less, not 
including any additional time allowed for in paragraph (c) of this 
section, intermediate Saturdays, Sundays, and Federal holidays are not 
included.
    (b) When papers are deemed to be filed or served. (1) Filing and 
service are deemed to be effective:
    (i) In the case of transmission by electronic mail or other 
electronic means, upon transmittal by the serving party;
    (ii) In the case of overnight delivery service or first class, 
registered, or certified mail, upon deposit in or delivery to an 
appropriate point of collection; or
    (iii) In the case of personal service or same day courier delivery, 
upon actual service.
    (2) The effective filing and service dates specified in paragraph 
(b)(1) of this section may be modified by the Board of Directors or ALJ 
in the case of filing or by agreement of the parties in the case of 
service.
    (c) Calculation of time for service and filing of responsive 
papers. Whenever a time limit is measured by a prescribed period from 
the service of any notice or paper, the applicable time limits are 
calculated as follows:
    (1) If service is made by electronic mail or other electronic means 
or by same day courier delivery, add one calendar day to the prescribed 
period;
    (2) If service is made by overnight delivery service, add two 
calendar days to the prescribed period; or
    (3) If service is made by first class, registered, or certified 
mail, add three calendar days to the prescribed period.


Sec.  308.13  Change of time limits.

    Except as otherwise provided by law, the ALJ may, for good cause 
shown, extend the time limits prescribed by the Uniform Rules or by any 
notice or order issued in the proceedings. After the referral of the 
case to the Board of Directors pursuant to Sec.  308.38, the Board of 
Directors may grant extensions of the time limits for good cause shown. 
Extensions may be granted at the motion of a party after notice and 
opportunity to respond is afforded all non-moving parties or on the 
Board of Directors' or the ALJ's own motion.

[[Page 89940]]

Sec.  308.14  Witness fees and expenses.

    (a) In general. A witness, including an expert witness, who 
testifies at a deposition or hearing will be paid the same fees for 
attendance and mileage as are paid in the United States district courts 
in proceedings in which the United States is a party, except as 
provided in paragraph (b) of this section and unless otherwise waived.
    (b) Exception for testimony by a party. In the case of testimony by 
a party, no witness fees or mileage need to be paid. The FDIC will not 
be required to pay any fees to, or expenses of, any witness not 
subpoenaed by the FDIC.
    (c) Timing of payment. Fees and mileage in accordance with this 
paragraph (c) must be paid in advance by the party requesting the 
subpoena, except that fees and mileage need not be tendered in advance 
where the FDIC is the party requesting the subpoena.


Sec.  308.15  Opportunity for informal settlement.

    Any respondent may, at any time in the proceeding, unilaterally 
submit to Enforcement Counsel written offers or proposals for 
settlement of a proceeding, without prejudice to the rights of any of 
the parties. Any such offer or proposal may only be made to Enforcement 
Counsel. Submission of a written settlement offer does not provide a 
basis for adjourning or otherwise delaying all or any portion of a 
proceeding under this part. No settlement offer or proposal, or any 
subsequent negotiation or resolution, is admissible as evidence in any 
proceeding.


Sec.  308.16  FDIC's right to conduct examination.

    Nothing contained in this subpart limits in any manner the right of 
the FDIC to conduct any examination, inspection, or visitation of any 
institution or institution-affiliated party, or the right of the FDIC 
to conduct or continue any form of investigation authorized by law.


Sec.  308.17  Collateral attacks on adjudicatory proceeding.

    If an interlocutory appeal or collateral attack is brought in any 
court concerning all or any part of an adjudicatory proceeding, the 
challenged adjudicatory proceeding will continue without regard to the 
pendency of that court proceeding. No default or other failure to act 
as directed in the adjudicatory proceeding within the times prescribed 
in this subpart will be excused based on the pendency before any court 
of any interlocutory appeal or collateral attack.


Sec.  308.18  Commencement of proceeding and contents of notice.

    (a) Commencement of proceeding. (1)(i) Except for change-in-control 
proceedings under section 7(j)(4) of the FDIA, 12 U.S.C. 1817(j)(4), a 
proceeding governed by this subpart is commenced by issuance of a 
notice by the FDIC.
    (ii) The notice must be served by Enforcement Counsel upon the 
respondent and given to any other appropriate financial institution 
supervisory authority where required by law. Enforcement Counsel may 
serve the notice upon counsel for the respondent, provided that 
Enforcement Counsel has confirmed that counsel represents the 
respondent in the matter and will accept service of the notice on 
behalf of the respondent.
    (iii) Enforcement Counsel must file the notice with OFIA.
    (2) Change-in control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the 
FDIC.
    (b) Contents of notice. Notice pleading applies. The notice must 
provide:
    (1) The legal authority for the proceeding and for the FDIC's 
jurisdiction over the proceeding;
    (2) Matters of fact or law showing that the FDIC is entitled to 
relief;
    (3) A proposed order or prayer for an order granting the requested 
relief;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as required by law or 
regulation;
    (6) The time within which to request a hearing as required by law 
or regulation; and
    (7) That the answer and/or request for a hearing must be filed with 
OFIA.


Sec.  308.19  Answer.

    (a) When. Within 20 days of service of the notice, respondent must 
file an answer as designated in the notice. In a civil money penalty 
proceeding, respondent must also file a request for a hearing within 20 
days of service of the notice.
    (b) Content of answer. An answer must specifically respond to each 
paragraph or allegation of fact contained in the notice and must admit, 
deny, or state that the respondent lacks sufficient information to 
admit or deny each allegation of fact. A statement of lack of 
information has the effect of a denial. Denials must fairly meet the 
substance of each allegation of fact denied; general denials are not 
permitted. When a respondent denies part of an allegation, that part 
must be denied and the remainder specifically admitted. Any allegation 
of fact in the notice which is not denied in the answer is deemed 
admitted for purposes of the proceeding. A respondent is not required 
to respond to the portion of a notice that constitutes the prayer for 
relief, or proposed order. The answer must set forth affirmative 
defenses, if any, asserted by the respondent.
    (c) Default--(1) Effect of failure to answer. Failure of a 
respondent to file an answer required by this section within the time 
provided constitutes a waiver of the respondent's right to appear and 
contest the allegations in the notice. If no timely answer is filed, 
Enforcement Counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the ALJ will file with the Board of Directors a 
recommended decision containing the findings and the relief sought in 
the notice. Any final order issued by the Board of Directors based upon 
a respondent's failure to answer is deemed to be an order issued upon 
consent.
    (2) Effect of failure to request a hearing in civil money penalty 
proceedings. If respondent fails to request a hearing as required by 
law within the time provided, the notice of assessment constitutes a 
final and unappealable order of the Board of Directors without further 
action by the ALJ.


Sec.  308.20  Amended pleadings.

    (a) Amendments. The notice or answer may be amended or supplemented 
at any stage of the proceeding. The respondent must answer an amended 
notice within the time remaining for the respondent's answer to the 
original notice, or within ten days after service of the amended 
notice, whichever period is longer, unless the Board of Directors or 
ALJ orders otherwise for good cause.
    (b) Amendments to conform to the evidence. When issues not raised 
in the notice or answer are tried at the hearing by express or implied 
consent of the parties, they will be treated in all respects as if they 
had been raised in the notice or answer, and no formal amendments are 
required. If evidence is objected to at the hearing on the ground that 
it is not within the issues raised by the notice or answer, the ALJ may 
admit the evidence when admission is likely to assist in adjudicating 
the merits of the action and the objecting party fails to satisfy the 
ALJ that the admission of such evidence would unfairly prejudice that 
party's action or defense upon the merits. The ALJ may grant a 
continuance to enable the objecting party to meet such evidence.

[[Page 89941]]

Sec.  308.21  Failure to appear.

    Failure of a respondent to appear in person at the hearing or by a 
duly authorized counsel constitutes a waiver of respondent's right to a 
hearing and is deemed an admission of the facts as alleged and consent 
to the relief sought in the notice. Without further proceedings or 
notice to the respondent, the ALJ will file with the Board of Directors 
a recommended decision containing the findings and the relief sought in 
the notice.


Sec.  308.22  Consolidation and severance of actions.

    (a) Consolidation. (1) On the motion of any party, or on the ALJ's 
own motion, the ALJ may consolidate, for some or all purposes, any two 
or more proceedings, if each such proceeding involves or arises out of 
the same transaction, occurrence, or series of transactions or 
occurrences, or involves at least one common respondent or a material 
common question of law or fact, unless such consolidation would cause 
unreasonable delay or injustice.
    (2) In the event of consolidation under paragraph (a)(1) of this 
section, appropriate adjustment to the prehearing schedule must be made 
to avoid unnecessary expense, inconvenience, or delay.
    (b) Severance. The ALJ may, upon the motion of any party, sever the 
proceeding for separate resolution of the matter as to any respondent 
only if the ALJ finds:
    (1) Undue prejudice or injustice to the moving party would result 
from not severing the proceeding; and
    (2) Such undue prejudice or injustice would outweigh the interests 
of judicial economy and expedition in the complete and final resolution 
of the proceeding.


Sec.  308.23  Motions.

    (a) In writing. (1) Except as otherwise provided in this section, 
an application or request for an order or ruling must be made by 
written motion.
    (2) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.
    (3) No oral argument may be held on written motions except as 
otherwise directed by the ALJ. Written memoranda, briefs, affidavits, 
or other relevant material or documents may be filed in support of or 
in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the ALJ directs that such motion be reduced to writing.
    (c) Filing of motions. Motions must be filed with the ALJ, except 
that following the filing of the recommended decision, motions must be 
filed with the Board of Directors.
    (d) Responses. (1) Except as otherwise provided in this section, 
within ten days after service of any written motion, or within such 
other period of time as may be established by the ALJ or the 
Administrative Officer, any party may file a written response to a 
motion. The ALJ will not rule on any oral or written motion before each 
party has had an opportunity to file a response.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed a consent by that party to the 
entry of an order substantially in the form of the order accompanying 
the motion.
    (e) Dilatory motions. Frivolous, dilatory or repetitive motions are 
prohibited. The filing of such motions may form the basis for 
sanctions.
    (f) Dispositive motions. Dispositive motions are governed by 
Sec. Sec.  308.29 and 308.30.


Sec.  308.24  Scope of document discovery.

    (a) Limits on discovery. (1) Subject to the limitations set out in 
paragraphs (b), (c), and (d) of this section, a party to a proceeding 
under this subpart may obtain document discovery by serving a written 
request to produce documents. For purposes of a request to produce 
documents, the term documents includes writings, drawings, graphs, 
charts, photographs, recordings, electronically stored information, and 
other data or data compilations stored in any medium from which 
information can be obtained either directly or, if necessary, after 
translation by the responding party, into a reasonably usable form.
    (2) Discovery by use of deposition is governed by subpart B of this 
part.
    (3) Discovery by use of either interrogatories or requests for 
admission is not permitted.
    (4) Any request to produce documents that calls for irrelevant 
material; or that is unreasonable, oppressive, excessive in scope, 
unduly burdensome, or repetitive of previous requests, or that seeks to 
obtain privileged documents will be denied or modified. A request is 
unreasonable, oppressive, excessive in scope, or unduly burdensome if, 
among other things, it fails to include justifiable limitations on the 
time period covered and the geographic locations to be searched, or the 
time provided to respond in the request is inadequate.
    (b) Relevance. A party may obtain document discovery regarding any 
non-privileged matter that has material relevance to the merits of the 
pending action.
    (c) Privileged matter. Privileged documents are not discoverable. 
Privileges include the attorney-client privilege, attorney work-product 
doctrine, bank examination privilege, law enforcement privilege, any 
government's or government agency's deliberative process privilege, and 
any other privileges the Constitution, any applicable act of Congress, 
or the principles of common law provide.
    (d) Time limits. All document discovery, including all responses to 
discovery requests, must be completed by the date set by the ALJ and no 
later than 30 days prior to the date scheduled for the commencement of 
the hearing, except as provided in the Local Rules. No exceptions to 
this time limit are permitted, unless the ALJ finds on the record that 
good cause exists for waiving the requirements of this paragraph (d).


Sec.  308.25  Request for document discovery from parties.

    (a) Document requests. (1) Any party may serve on any other party a 
request to produce and permit the requesting party or its 
representative to inspect or copy any discoverable documents that are 
in the possession, custody, or control of the party upon whom the 
request is served. In the case of a request for inspection, the 
responding party may produce copies of documents or of electronically 
stored information instead of permitting inspection.
    (2) The request:
    (i) Must describe with reasonable particularity each item or 
category of items to be inspected or produced; and
    (ii) Must specify a reasonable time, place, and manner for the 
inspection or production.
    (b) Production or copying--(1) General. Unless otherwise specified 
by the ALJ or agreed upon by the parties, the producing party must 
produce copies of documents as they are kept in the usual course of 
business or organized to correspond to the categories of the request, 
and electronically stored information must be produced in a form in 
which it is ordinarily maintained or in a reasonably usable form.
    (2) Costs. The producing party must pay its own costs to respond to 
a discovery request, unless otherwise agreed by the parties.
    (c) Obligation to update responses. A party who has responded to a 
discovery request with a response that was complete when made is not 
required to supplement the response to include documents thereafter 
acquired, unless the responding party learns:

[[Page 89942]]

    (1) The response was materially incorrect when made; or
    (2) The response, though correct when made, is no longer true and a 
failure to amend the response is, in substance, a knowing concealment.
    (d) Motions to limit discovery. (1) Any party that objects to a 
discovery request may, within 20 days of being served with such 
request, file a motion in accordance with the provisions of Sec.  
308.23 to strike or otherwise limit the request. If an objection is 
made to only a portion of an item or category in a request, the portion 
objected to must be specified. Any objections not made in accordance 
with this paragraph and Sec.  308.23 are waived.
    (2) The party who served the request that is the subject of a 
motion to strike or limit may file a written response within ten days 
of service of the motion. No other party may file a response.
    (e) Privilege. At the time other documents are produced, the 
producing party must reasonably identify all documents withheld on the 
grounds of privilege and must produce a statement of the basis for the 
assertion of privilege. When similar documents that are protected by 
attorney-client privilege, attorney work-product doctrine, bank 
examination privilege, law enforcement privilege, any government's or 
government agency's deliberative process privilege, or any other 
privileges of the Constitution, any applicable act of Congress, or the 
principles of common law, or are voluminous, these documents may be 
identified by category instead of by individual document. The ALJ 
retains discretion to determine when the identification by category is 
insufficient.
    (f) Motions to compel production. (1) If a party withholds any 
documents as privileged or fails to comply fully with a discovery 
request, the requesting party may, within ten days of the assertion of 
privilege or of the time the failure to comply becomes known to the 
requesting party, file a motion in accordance with the provisions of 
Sec.  308.23 for the issuance of a subpoena compelling production.
    (2) The party who asserted the privilege or failed to comply with 
the document request may file a written response to a motion to compel 
within ten days of service of the motion. No other party may file a 
response.
    (g) Ruling on motions. After the time for filing responses pursuant 
to this section has expired, the ALJ will rule promptly on all motions 
filed pursuant to this section. If the ALJ determines that a discovery 
request, or any of its terms, calls for irrelevant material, is 
unreasonable, oppressive, excessive in scope, unduly burdensome, or 
repetitive of previous requests, or seeks to obtain privileged 
documents, the ALJ may deny or modify the request, and may issue 
appropriate protective orders, upon such conditions as justice may 
require. The pendency of a motion to strike or limit discovery or to 
compel production is not a basis for staying or continuing the 
proceeding, unless otherwise ordered by the ALJ. Notwithstanding any 
other provision in this part, the ALJ may not release, or order a party 
to produce, documents withheld on grounds of privilege if the party has 
stated to the ALJ its intention to file a timely motion for 
interlocutory review of the ALJ's order to produce the documents, and 
until the motion for interlocutory review has been decided.
    (h) Enforcing discovery subpoenas. If the ALJ issues a subpoena 
compelling production of documents by a party, the subpoenaing party 
may, in the event of noncompliance and to the extent authorized by 
applicable law, apply to any appropriate United States district court 
for an order requiring compliance with the subpoena. A party's right to 
seek court enforcement of a subpoena will not in any manner limit the 
sanctions that may be imposed by the ALJ against a party who fails to 
produce subpoenaed documents.


Sec.  308.26  Document subpoenas to nonparties.

    (a) General rules. (1) Any party may apply to the ALJ for the 
issuance of a document discovery subpoena addressed to any person who 
is not a party to the proceeding. The application must contain a 
proposed document subpoena and a brief statement showing the general 
relevance and reasonableness of the scope of documents sought. The 
subpoenaing party must specify a reasonable time, place, and manner for 
making production in response to the document subpoena.
    (2) A party may apply for a document subpoena under this section 
only within the time period during which such party could serve a 
discovery request under Sec.  308.24(d). The party obtaining the 
document subpoena is responsible for serving it on the subpoenaed 
person and for serving copies on all parties. Document subpoenas may be 
served in any state, territory, or possession of the United States, the 
District of Columbia, or as otherwise provided by law.
    (3) The ALJ will promptly issue any document subpoena requested 
pursuant to this section. If the ALJ determines that the application 
does not set forth a valid basis for the issuance of the subpoena, or 
that any of its terms are unreasonable, oppressive, excessive in scope, 
or unduly burdensome, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon such conditions as may be consistent 
with the Uniform Rules.
    (b) Motion to quash or modify. (1) Any person to whom a document 
subpoena is directed may file a motion to quash or modify such subpoena 
with the ALJ. The motion must be accompanied by a statement of the 
basis for quashing or modifying the subpoena. The movant must serve the 
motion on all parties, and any party may respond to such motion within 
ten days of service of the motion.
    (2) Any motion to quash or modify a document subpoena must be filed 
on the same basis, including the assertion of privilege, upon which a 
party could object to a discovery request under Sec.  308.25(d), and 
during the same time limits during which such an objection could be 
filed.
    (c) Enforcing document subpoenas. If a subpoenaed person fails to 
comply with any subpoena issued pursuant to this section or any order 
of the ALJ, which directs compliance with all or any portion of a 
document subpoena, the subpoenaing party or any other aggrieved party 
may, to the extent authorized by applicable law, apply to an 
appropriate United States district court for an order requiring 
compliance with so much of the document subpoena as the ALJ has not 
quashed or modified. A party's right to seek court enforcement of a 
document subpoena will in no way limit the sanctions that may be 
imposed by the ALJ on a party who induces a failure to comply with 
subpoenas issued under this section.


Sec.  308.27  Deposition of witness unavailable for hearing.

    (a) General rules. (1) If a witness will not be available for the 
hearing, a party desiring to preserve that witness' testimony for the 
record may apply in accordance with the procedures set forth in 
paragraph (a)(2) of this section, to the ALJ for the issuance of a 
subpoena, including a subpoena duces tecum, requiring the attendance of 
the witness at a deposition. The ALJ may issue a deposition subpoena 
under this section upon showing:
    (i) The witness will be unable to attend or may be prevented from 
attending the hearing because of age, sickness or infirmity, or will 
otherwise be unavailable;
    (ii) The witness' unavailability was not procured or caused by the 
subpoenaing party;
    (iii) The testimony is reasonably expected to be material; and

[[Page 89943]]

    (iv) Taking the deposition will not result in any undue burden to 
any other party and will not cause undue delay of the proceeding.
    (2) The application must contain a proposed deposition subpoena and 
a brief statement of the reasons for the issuance of the subpoena. The 
subpoena must name the witness whose deposition is to be taken and 
specify the time, manner, and place for taking the deposition. A 
deposition subpoena may require the witness to be deposed at any place 
within the country in which that witness resides or has a regular place 
of employment, by remote means, or such other convenient place or 
manner, as the ALJ fixes.
    (3) Any requested subpoena that sets forth a valid basis for its 
issuance must be promptly issued, unless the ALJ requires a written 
response or requires attendance at a conference concerning whether the 
requested subpoena should be issued.
    (4) The party obtaining a deposition subpoena is responsible for 
serving it on the witness and for serving copies on all parties. Unless 
the ALJ orders otherwise, no deposition under this section may be taken 
on fewer than ten days' notice to the witness and all parties.
    (b) Objections to deposition subpoenas. (1) The witness and any 
party who has not had an opportunity to oppose a deposition subpoena 
issued under this section may file a motion with the ALJ to quash or 
modify the subpoena prior to the time for compliance specified in the 
subpoena, but not more than ten days after service of the subpoena.
    (2) A statement of the basis for the motion to quash or modify a 
subpoena issued under this section must accompany the motion. The 
motion must be served on all parties.
    (c) Procedure upon deposition. (1) Each witness testifying pursuant 
to a deposition subpoena must be duly sworn. By stipulation of the 
parties or by order of the ALJ, a court reporter or other person 
authorized to administer an oath may administer the oath remotely 
without being in the physical presence of the deponent. Each party must 
have the right to examine the witness. Objections to questions or 
documents must be in short form, stating the grounds for the objection. 
Failure to object to questions or documents is not deemed a waiver 
except where the ground for the objection might have been avoided if 
the objection had been timely presented. All questions, answers, and 
objections must be recorded.
    (2) Any party may move before the ALJ for an order compelling the 
witness to answer any questions the witness has refused to answer or 
submit any evidence the witness has refused to submit during the 
deposition.
    (3) The deposition must be subscribed by the witness, unless the 
parties and the witness, by stipulation, have waived the signing, or 
the witness is ill, cannot be found, or has refused to sign. If the 
deposition is not subscribed by the witness, the court reporter taking 
the deposition must certify that the transcript is a true and complete 
transcript of the deposition.
    (d) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section, or fails to comply 
with any order of the ALJ, which directs compliance with all or any 
portion of a deposition subpoena under paragraph (b) or (c)(2) of this 
section, the subpoenaing party or other aggrieved party may, to the 
extent authorized by applicable law, apply to an appropriate United 
States district court for an order requiring compliance with the 
portions of the subpoena with which the subpoenaed party has not 
complied. A party's right to seek court enforcement of a deposition 
subpoena in no way limits the sanctions that may be imposed by the ALJ 
on a party who fails to comply with, or procures a failure to comply 
with, a subpoena issued under this section.


Sec.  308.28  Interlocutory review.

    (a) General rule. The Board of Directors may review a ruling of the 
ALJ prior to the certification of the record to the Board of Directors 
only in accordance with the procedures set forth in this section and 
Sec.  308.23.
    (b) Scope of review. The Board of Directors may exercise 
interlocutory review of a ruling of the ALJ if the Board of Directors 
finds:
    (1) The ruling involves a controlling question of law or policy as 
to which substantial grounds exist for a difference of opinion;
    (2) Immediate review of the ruling may materially advance the 
ultimate termination of the proceeding;
    (3) Subsequent modification of the ruling at the conclusion of the 
proceeding would be an inadequate remedy; or
    (4) Subsequent modification of the ruling would cause unusual delay 
or expense.
    (c) Procedure. Any request for interlocutory review must be filed 
by a party with the ALJ within ten days of the ruling and must 
otherwise comply with Sec.  308.23. Any party may file a response to a 
request for interlocutory review in accordance with Sec.  308.23(d). 
Upon the expiration of the time for filing all responses, the ALJ will 
refer the matter to the Board of Directors for final disposition.
    (d) Suspension of proceeding. Neither a request for interlocutory 
review nor any disposition of such a request by the Board of Directors 
under this section suspends or stays the proceeding unless otherwise 
ordered by the ALJ or the Board of Directors.


Sec.  308.29  Summary disposition.

    (a) In general. The ALJ will recommend that the Board of Directors 
issue a final order granting a motion for summary disposition if the 
undisputed pleaded facts, admissions, affidavits, stipulations, 
documentary evidence, matters as to which official notice may be taken, 
and any other evidentiary materials properly submitted in connection 
with a motion for summary disposition show:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.
    (b) Filing of motions and responses. (1) Any party who believes 
there is no genuine issue of material fact to be determined and that 
the party is entitled to a decision as a matter of law may move at any 
time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 days after service of such a motion, 
or within such time period as allowed by the ALJ, may file a response 
to such motion.
    (2) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, investigatory depositions, transcripts, 
affidavits, and any other evidentiary materials that the moving party 
contends supports the moving party's position. The motion must also be 
accompanied by a brief containing the points and authorities in support 
of the contention of the moving party. Any party opposing a motion for 
summary disposition must file a statement setting forth those material 
facts as to which the opposing party contends a genuine dispute exists. 
Such opposition must be supported by evidence of the same type as that 
submitted with the motion for summary disposition and a brief 
containing the points and authorities in support of the contention that 
summary disposition would be inappropriate.

[[Page 89944]]

    (c) Hearing on motion. At the written request of any party or on 
the ALJ's own motion, the ALJ may hear oral argument on the motion for 
summary disposition.
    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the ALJ will determine whether 
the moving party is entitled to summary disposition. If the ALJ 
determines that summary disposition is warranted, the ALJ will submit a 
recommended decision to that effect to the Board of Directors. If the 
ALJ finds that no party is entitled to summary disposition, the ALJ 
will make a ruling denying the motion.


Sec.  308.30  Partial summary disposition.

    If the ALJ determines that a party is entitled to summary 
disposition as to certain claims only, the ALJ will defer submitting a 
recommended decision as to those claims. A hearing on the remaining 
issues must be ordered. Those claims for which the ALJ has determined 
that summary disposition is warranted will be addressed in the 
recommended decision filed at the conclusion of the hearing.


Sec.  308.31  Scheduling and prehearing conferences.

    (a) Scheduling conference. Within 30 days of service of the notice 
or order commencing a proceeding, the ALJ will direct counsel for all 
parties to meet with the ALJ at a specified time and manner prior to 
the hearing for the purpose of scheduling the course and conduct of the 
proceeding. This meeting is called a ``scheduling conference.'' The 
schedule for the identification of potential witnesses, the time for 
and manner of discovery, and the exchange of any prehearing materials 
including witness lists, statements of issues, stipulations, exhibits, 
and any other materials may also be determined at the scheduling 
conference.
    (b) Prehearing conferences. The ALJ may, in addition to the 
scheduling conference, on the ALJ's own motion or at the request of any 
party, direct counsel for the parties to confer with the ALJ at a 
prehearing conference to address any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, 
authenticity and admissibility into evidence of documents;
    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes;
    (7) Amendments to pleadings; and
    (8) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (c) Transcript. The ALJ may require that a scheduling or prehearing 
conference be recorded by a court reporter. A transcript of the 
conference and any materials filed, including orders, becomes part of 
the record of the proceeding. A party may obtain a copy of the 
transcript at the party's expense.
    (d) Scheduling or prehearing orders. At or within a reasonable time 
following the conclusion of the scheduling conference or any prehearing 
conference, the ALJ will serve on each party an order setting forth any 
agreements reached and any procedural determinations made.


Sec.  308.32  Prehearing submissions.

    (a) Party prehearing submissions. Within the time set by the ALJ, 
but in no case later than 20 days before the start of the hearing, each 
party must file with the ALJ and serve on every other party:
    (1) A prehearing statement that states:
    (i) The party's position with respect to the legal issues 
presented;
    (ii) The statutory and case law upon which the party relies; and
    (iii) The facts that the party expects to prove at the hearing;
    (2) A final list of witnesses to be called to testify at the 
hearing, including the name, mailing address, and electronic mail 
address of each witness and a short summary of the expected testimony 
of each witness, which need not identify the exhibits to be relied upon 
by each witness at the hearing;
    (3) A list of the exhibits expected to be introduced at the hearing 
along with a copy of each exhibit; and
    (4) Stipulations of fact, if any.
    (b) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraph (a) of 
this section, except for good cause shown.


Sec.  308.33  Public hearings.

    (a) General rule. All hearings must be open to the public, unless 
the FDIC, in its discretion, determines that holding an open hearing 
would be contrary to the public interest. Within 20 days of service of 
the notice or, in the case of change-in-control proceedings under 
section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), within 20 days from 
service of the hearing order, any respondent may file with the 
Administrative Officer a request for a private hearing, and any party 
may file a reply to such a request. A party must serve on the ALJ a 
copy of any request or reply the party files with the Administrative 
Officer. The form of, and procedure for, these requests and replies are 
governed by Sec.  308.23. A party's failure to file a request or a 
reply constitutes a waiver of any objections regarding whether the 
hearing will be public or private.
    (b) Filing document under seal. Enforcement Counsel, in Enforcement 
Counsel's discretion, may file any document or part of a document under 
seal if disclosure of the document would be contrary to the public 
interest. The ALJ will take all appropriate steps to preserve the 
confidentiality of such documents or parts thereof, including closing 
portions of the hearing to the public.


Sec.  308.34  Hearing subpoenas.

    (a) Issuance. (1) Upon application of a party showing general 
relevance and reasonableness of scope of the testimony or other 
evidence sought, the ALJ may issue a subpoena or a subpoena duces tecum 
requiring the attendance of a witness at the hearing or the production 
of documentary or physical evidence at the hearing. The application for 
a hearing subpoena must also contain a proposed subpoena specifying the 
attendance of a witness or the production of evidence from any state, 
territory, or possession of the United States, the District of 
Columbia, or as otherwise provided by law at any designated place where 
the hearing is being conducted. The party making the application must 
serve a copy of the application and the proposed subpoena on every 
other party.
    (2) A party may apply for a hearing subpoena at any time before the 
commencement of a hearing. During a hearing, a party may make an 
application for a subpoena orally on the record before the ALJ.
    (3) The ALJ will promptly issue any hearing subpoena requested 
pursuant to this section. If the ALJ determines that the application 
does not set forth a valid basis for the issuance of the subpoena, or 
that any of its terms are unreasonable, oppressive, excessive in scope, 
or unduly burdensome, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon any conditions consistent with this 
subpart. Upon issuance by the ALJ, the party making the application 
must serve the subpoena on the person named in the subpoena and on each 
party.
    (b) Motion to quash or modify. (1) Any person to whom a hearing 
subpoena is directed or any party may

[[Page 89945]]

file a motion to quash or modify the subpoena, accompanied by a 
statement of the basis for quashing or modifying the subpoena. The 
movant must serve the motion on each party and on the person named in 
the subpoena. Any party may respond to the motion within ten days of 
service of the motion.
    (2) Any motion to quash or modify a hearing subpoena must be filed 
prior to the time specified in the subpoena for compliance but not more 
than ten days after the date of service of the subpoena upon the 
movant.
    (c) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section or any order of the 
ALJ which directs compliance with all or any portion of a document 
subpoena, the subpoenaing party or any other aggrieved party may seek 
enforcement of the subpoena pursuant to Sec.  308.26(c).


Sec.  308.35  Conduct of hearings.

    (a) General rules. (1) Conduct of hearings. Hearings must be 
conducted so as to provide a fair and expeditious presentation of the 
relevant disputed issues. Each party has the right to present its case 
or defense by oral and documentary evidence and to conduct such cross 
examination as may be required for full disclosure of the facts.
    (2) Order of hearing. Enforcement Counsel will present its case-in-
chief first, unless otherwise ordered by the ALJ, or unless otherwise 
expressly specified by law or regulation. Enforcement Counsel will be 
the first party to present an opening statement and a closing statement 
and may make a rebuttal statement after the respondent's closing 
statement. If there are multiple respondents, respondents may agree 
among themselves as to their order of presentation of their cases, but 
if they do not agree, the ALJ will fix the order.
    (3) Examination of witnesses. Only one counsel for each party may 
conduct an examination of a witness, except that in the case of 
extensive direct examination, the ALJ may permit more than one counsel 
for the party presenting the witness to conduct the examination. A 
party may have one counsel conduct the direct examination and another 
counsel conduct re-direct examination of a witness, or may have one 
counsel conduct the cross examination of a witness and another counsel 
conduct the re-cross examination of a witness.
    (4) Stipulations. Unless the ALJ directs otherwise, all 
stipulations of fact and law previously agreed upon by the parties, and 
all documents, the admissibility of which have been previously 
stipulated, will be admitted into evidence upon commencement of the 
hearing.
    (b) Transcript. The hearing must be recorded and transcribed. The 
reporter will make the transcript available to any party upon payment 
by that party to the reporter of the cost of the transcript. The ALJ 
may order the record corrected, either upon motion to correct, upon 
stipulation of the parties, or following notice to the parties upon the 
ALJ's own motion.
    (c) Electronic presentation. Based on the circumstances of each 
hearing, the ALJ may direct the use of, or any party may use, an 
electronic presentation during the hearing. If the ALJ requires an 
electronic presentation during the hearing, each party will be 
responsible for their own presentation and related costs, unless the 
parties agree to another manner in which to allocate presentation 
responsibilities and costs.


Sec.  308.36  Evidence.

    (a) Admissibility. (1) Except as is otherwise set forth in this 
section, relevant, material, and reliable evidence that is not unduly 
repetitive is admissible to the fullest extent authorized by the 
Administrative Procedure Act and other applicable law.
    (2) Evidence that would be admissible under the Federal Rules of 
Evidence is admissible in a proceeding conducted pursuant to this 
subpart.
    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence may not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant, 
material, reliable, and not unduly repetitive.
    (b) Official notice. (1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court and any material information in the official public 
records of any Federal or State government agency.
    (2) All matters officially noticed by the ALJ or the Board of 
Directors must appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, must be afforded an opportunity to 
object.
    (c) Documents. (1) A duplicate copy of a document is admissible to 
the same extent as the original, unless a genuine issue is raised as to 
whether the copy is in some material respect not a true and legible 
copy of the original.
    (2) Subject to the requirements of paragraph (a) of this section, 
any document, including a report of examination, supervisory activity, 
inspection, or visitation, prepared by an appropriate Federal financial 
institutions regulatory agency or by a State regulatory agency, is 
admissible either with or without a sponsoring witness.
    (3) Witnesses may use existing or newly created charts, exhibits, 
calendars, calculations, outlines, or other graphic material to 
summarize, illustrate, or simplify the presentation of testimony. Such 
materials may, subject to the ALJ's discretion, be used with or without 
being admitted into evidence.
    (d) Objections. (1) Objections to the admissibility of evidence 
must be timely made and rulings on all objections must appear on the 
record.
    (2) When an objection to a question or line of questioning 
propounded to a witness is sustained, the examining counsel may make a 
specific proffer on the record of what the examining counsel expected 
to prove by the expected testimony of the witness either by 
representation of counsel or by direct questioning of the witness.
    (3) The ALJ will retain rejected exhibits, adequately marked for 
identification, for the record, and transmit such exhibits to the Board 
of Directors.
    (4) Failure to object to admission of evidence or to any ruling 
constitutes a waiver of the objection.
    (e) Stipulations. The parties may stipulate as to any relevant 
matters of fact or the authentication of any relevant documents. Such 
stipulations must be received in evidence at a hearing and are binding 
on the parties with respect to the matters therein stipulated.
    (f) Depositions of unavailable witnesses. (1) If a witness is 
unavailable to testify at a hearing, and that witness has testified in 
a deposition to which all parties in a proceeding had notice and an 
opportunity to participate, a party may offer as evidence all or any 
part of the transcript of the deposition, including deposition 
exhibits, if any.
    (2) Such deposition transcript is admissible to the same extent 
that testimony would have been admissible had that person testified at 
the hearing, provided that if a witness refused to answer proper 
questions during the depositions, the ALJ may, on that basis, limit the 
admissibility of the deposition in any manner that justice requires.
    (3) Only those portions of a deposition received in evidence at the 
hearing constitute a part of the record.


Sec.  308.37  Post-hearing filings.

    (a) Proposed findings and conclusions and supporting briefs. (1) 
Using the same method of service for each party, the ALJ will serve 
notice upon each party that the certified transcript,

[[Page 89946]]

together with all hearing exhibits and exhibits introduced but not 
admitted into evidence at the hearing, has been filed. Any party may 
file with the ALJ proposed findings of fact, proposed conclusions of 
law, and a proposed order within 30 days following service of this 
notice by the ALJ or within such longer period as may be ordered by the 
ALJ.
    (2) Proposed findings and conclusions must be supported by citation 
to any relevant authorities and by page references to any relevant 
portions of the record. A post-hearing brief may be filed in support of 
proposed findings and conclusions, either as part of the same document 
or in a separate document. Any party who fails to file timely with the 
ALJ any proposed finding or conclusion is deemed to have waived the 
right to raise in any subsequent filing or submission any issue not 
addressed in such party's proposed finding or conclusion.
    (b) Reply briefs. Reply briefs may be filed within 15 days after 
the date on which the parties' proposed findings, conclusions, and 
order are due. Reply briefs must be strictly limited to responding to 
new matters, issues, or arguments raised in another party's papers. A 
party who has not filed proposed findings of fact and conclusions of 
law or a post-hearing brief may not file a reply brief.
    (c) Simultaneous filing required. The ALJ will not order the filing 
by any party of any brief or reply brief in advance of the other 
party's filing of its brief.


Sec.  308.38  Recommended decision and filing of record.

    (a) Filing of recommended decision and record. Within 45 days after 
expiration of the time allowed for filing reply briefs under Sec.  
308.37(b), the ALJ will file with and certify to the Administrative 
Officer, for decision, the record of the proceeding. The record must 
include the ALJ's recommended decision, recommended findings of fact, 
recommended conclusions of law, and proposed order; all prehearing and 
hearing transcripts, exhibits, and rulings; and the motions, briefs, 
memoranda, and other supporting papers filed in connection with the 
hearing. The ALJ will serve upon each party the recommended decision, 
findings, conclusions, and proposed order.
    (b) Filing of index. At the same time the ALJ files with and 
certifies to the Administrative Officer for final determination the 
record of the proceeding, the ALJ will furnish to the Administrative 
Officer a certified index of the entire record of the proceeding. The 
certified index must include, at a minimum, an entry for each paper, 
document, or motion filed with the ALJ in the proceeding, the date of 
the filing, and the identity of the filer. The certified index must 
also include an exhibit index containing, at a minimum, an entry 
consisting of exhibit number and title or description for: each exhibit 
introduced and admitted into evidence at the hearing; each exhibit 
introduced but not admitted into evidence at the hearing; each exhibit 
introduced and admitted into evidence after the completion of the 
hearing; and each exhibit introduced but not admitted into evidence 
after the completion of the hearing.


Sec.  308.39  Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  308.38, a party may file with the Administrative Officer written 
exceptions to the ALJ's recommended decision, findings, conclusions, or 
proposed order, to the admission or exclusion of evidence, or to the 
failure of the ALJ to make a ruling proposed by a party. A supporting 
brief may be filed at the time the exceptions are filed, either as part 
of the same document or in a separate document.
    (b) Effect of failure to file or raise exceptions. (1) Failure of a 
party to file exceptions to those matters specified in paragraph (a) of 
this section within the time prescribed is deemed a waiver of objection 
thereto.
    (2) No exception need be considered by the Board of Directors if 
the party taking exception had an opportunity to raise the same 
objection, issue, or argument before the ALJ and failed to do so.
    (c) Contents. (1) All exceptions and briefs in support of such 
exceptions must be confined to the particular matters in, or omissions 
from, the ALJ's recommendations to which that party takes exception.
    (2) All exceptions and briefs in support of exceptions must set 
forth page or paragraph references to the specific parts of the ALJ's 
recommendations to which exception is taken, the page or paragraph 
references to those portions of the record relied upon to support each 
exception, and the legal authority relied upon to support each 
exception.


Sec.  308.40  Review by the Board of Directors.

    (a) Notice of submission to the Board of Directors. When the 
Administrative Officer determines that the record in the proceeding is 
complete, the Administrative Officer will serve notice upon the parties 
that the proceeding has been submitted to the Board of Directors for 
final decision.
    (b) Oral argument before the Board of Directors. Upon the 
initiative of the Board of Directors or on the written request of any 
party filed with the Administrative Officer within the time for filing 
exceptions, the Board of Directors may order and hear oral argument on 
the recommended findings, conclusions, decision, and order of the ALJ. 
A written request by a party must show good cause for oral argument and 
state reasons why arguments cannot be presented adequately in writing. 
A denial of a request for oral argument may be set forth in the Board 
of Directors' final decision. Oral argument before the Board of 
Directors must be on the record.
    (c) Board of Directors' final decision. (1) Decisional employees 
may advise and assist the Board of Directors in the consideration and 
disposition of the case. The final decision of the Board of Directors 
will be based upon review of the entire record of the proceeding, 
except that the Board of Directors may limit the issues to be reviewed 
to those findings and conclusions to which opposing arguments or 
exceptions have been filed by the parties.
    (2) The Board of Directors will render a final decision within 90 
days after notification of the parties that the case has been submitted 
for final decision, or 90 days after oral argument, whichever is later, 
unless the Board of Directors orders that the action or any aspect 
thereof be remanded to the ALJ for further proceedings. Copies of the 
final decision and order of the Board of Directors will be served upon 
each party to the proceeding, upon other persons required by statute, 
and, if directed by the Board of Directors or required by statute, upon 
any appropriate State or Federal supervisory authority.


Sec.  308.41  Stays pending judicial review.

    The commencement of proceedings for judicial review of a final 
decision and order of the FDIC may not, unless specifically ordered by 
the Board of Directors or a reviewing court, operate as a stay of any 
order issued by the FDIC. The Board of Directors may, in its 
discretion, and on such terms as the Board of Directors finds just, 
stay the effectiveness of all or any part of an order pending a final 
decision on a petition for review of that order.

[[Page 89947]]

Subpart B--General Rules of Procedure


Sec.  308.100  Applicability date.

    These Local Rules in this subpart B apply to adjudicatory 
proceedings initiated on or after April 1, 2024. Any adjudicatory 
proceedings initiated before April 1, 2024, continue to be governed by 
the previous version of the Local Rules included in appendix A to this 
part.


Sec.  308.101  Scope of Local Rules.

    (a) This subpart B and subpart C of this part prescribe rules of 
practice and procedure to be followed in the administrative enforcement 
proceedings initiated by the FDIC as set forth in Sec.  308.1.
    (b) Except as otherwise specifically provided, the Uniform Rules 
and subpart B of the Local Rules will not apply to subparts D through T 
of this part.
    (c) Subpart C of this part will apply to any administrative 
proceeding initiated by the FDIC.
    (d) Subparts A through C of this part prescribe the rules of 
practice and procedure to applicable to adjudicatory proceedings as to 
which hearings on the record are provided for by the assessment of 
civil money penalties by the FDIC against institutions, institution-
affiliated parties, and certain other persons for which it is the 
appropriate regulatory agency for any violation of 15 U.S.C. 78o(c)(4).


Sec.  308.102  Authority of Board of Directors and Administrative 
Officer.

    (a) The Board of Directors. (1) The Board of Directors may, at any 
time during the pendency of a proceeding, perform, direct the 
performance of, or waive performance of, any act which could be done or 
ordered by the Administrative Officer.
    (2) Nothing contained in this part shall be construed to limit the 
power of the Board of Directors granted by applicable statutes or 
regulations.
    (b) The Administrative Officer. (1) When no ALJ has jurisdiction 
over a proceeding, the Administrative Officer may act in place of, and 
with the same authority as, an ALJ, except that the Administrative 
Officer may not hear a case on the merits or make a recommended 
decision on the merits to the Board of Directors.
    (2) Pursuant to authority delegated by the Board of Directors, the 
Administrative Officer and Assistant Administrative Officer, upon the 
advice and recommendation of the Deputy General Counsel for Litigation 
or, in the Deputy General Counsel's absence, the Assistant General 
Counsel for General Litigation, may issue rulings in proceedings under 
12 U.S.C. 1817(j), 1818 1828(j), 1829, 1831i, and 1831o concerning:
    (i) Denials of requests for private hearing;
    (ii) Interlocutory appeals;
    (iii) Stays pending judicial review;
    (iv) Reopenings of the record and/or remands of the record to the 
ALJ;
    (v) Supplementation of the evidence in the record;
    (vi) All remands from the courts of appeals not involving 
substantive issues;
    (vii) Extensions of stays of orders terminating deposit insurance; 
and
    (viii) All matters, including final decisions, in proceedings under 
12 U.S.C. 1818(g).


Sec.  308.103  Assignment of Administrative Law Judge (ALJ).

    (a) Assignment. Unless otherwise directed by the Board of Directors 
or as otherwise provided in the Local Rules, a hearing within the scope 
of this part must be held before an ALJ of the Office of Financial 
Institution Adjudication (OFIA).
    (b) Procedures. Upon receiving a copy of the notice under Sec.  
308.18(a) from Enforcement Counsel, OFIA must assign an ALJ to the 
matter and advise the parties, in writing, of the ALJ assignment.


Sec.  308.104  Filings with the Board of Directors.

    (a) General rule. All materials required to be filed with or 
referred to the Board of Directors in any proceedings under this part 
must be filed with the Administrative Officer in a manner specified in 
Sec.  308.10(b). The Administrative Officer's address is: Federal 
Deposit Insurance Corporation, Attn: Administrative Officer, 550 17th 
Street NW, Washington, DC 20429. Electronic copies of all pleadings 
must be sent to <a href="/cdn-cgi/l/email-protection#35706666705b535a47565058505b417456415c5a5b715a565e50417553515c561b525a43"><span class="__cf_email__" data-cfemail="783d2b2b3d161e170a1b1d151d160c391b0c1117163c171b131d0c381e1c111b561f170e">[email protected]</span></a> with the docket 
number clearly identified.
    (b) Scope. Filings to be made with the Administrative Officer 
include pleadings and motions filed during the proceeding; the record 
filed by the ALJ after the issuance of a recommended decision; the 
recommended decision filed by the ALJ following a motion for summary 
disposition; referrals by the ALJ of motions for interlocutory review; 
motions and responses to motions filed by the parties after the record 
has been certified to the Board of Directors; exceptions and requests 
for oral argument; and any other papers required to be filed with the 
Board of Directors under this part.


Sec.  308.105  Custodian of the record.

    The Administrative Officer is the official custodian of the record 
when no ALJ has jurisdiction over the proceeding. The Administrative 
Officer will maintain the official record of all papers filed in each 
proceeding.


Sec.  308.106  Written testimony in lieu of oral hearing.

    (a) General rule. (1) At any time more than 15 days before the 
hearing is to commence, on the motion of any party or on the ALJ's own 
motion, the ALJ may order that the parties present part or all of their 
case-in-chief and, if ordered, their rebuttal, in the form of exhibits 
and written statements sworn to by the witness offering such statements 
as evidence, provided that if any party objects, the ALJ will not 
require such a format if that format would violate the objecting 
party's right under the Administrative Procedure Act, or other 
applicable law, or would otherwise unfairly prejudice that party.
    (2) Any such order will provide that each party must, upon request, 
have the same right of oral cross-examination (or redirect examination) 
as would exist had the witness testified orally rather than through a 
written statement. Such order must also provide that any party has a 
right to call any hostile witness or adverse party to testify orally.
    (b) Scheduling of submission of written testimony. (1) If written 
direct testimony and exhibits are ordered under paragraph (a) of this 
section, the ALJ will require that it be filed within the time period 
for commencement of the hearing, and the hearing will be deemed to have 
commenced on the day such testimony is due.
    (2) Absent good cause shown, written rebuttal, if any, must be 
submitted and the oral portion of the hearing begun within 30 days of 
the date set for filing written direct testimony.
    (3) The ALJ will direct, unless good cause requires otherwise, 
that--
    (i) All parties must simultaneously file any exhibits and written 
direct testimony required under paragraph (b)(1) of this section; and
    (ii) All parties must simultaneously file any exhibits and written 
rebuttal required under paragraph (b)(2) of this section.
    (c) Failure to comply with order to file written testimony. (1) The 
failure of any party to comply with an order to file written testimony 
or exhibits at the time and in the matter required under this section 
will be deemed a waiver of that party's right to present any evidence,

[[Page 89948]]

except testimony of a previously identified adverse party or hostile 
witness. Failure to file written testimony or exhibits is, however, not 
a waiver of that party's right of cross-examination or a waiver of the 
right to present rebuttal evidence that was not required to be 
submitted in written form.
    (2) Late filings of papers under this section may be allowed and 
accepted only upon good cause shown.


Sec.  308.107  Supplemental discovery rules.

    (a) Scope of discovery. Subject to the limitations set out in Sec.  
308.24, a party may obtain discovery regarding any non-privileged 
matter that has material relevance to the merits of the pending action, 
and is proportional to the needs of the action, considering the 
importance of the issues at stake in the action, the parties' 
resources, the importance of the discovery in resolving the issues, and 
whether the burden or expense of the proposed discovery outweighs its 
likely benefit. Parties may obtain discovery only through the 
production of documents and depositions, as set forth in the Uniform 
Rules and the Local Rules.
    (b) Joint Discovery Plan. Within the time period set by the ALJ and 
prior to serving any discovery requests, the parties must meet and 
confer to consider the discovery needed to support their claims and 
defenses and discuss any issues about preserving discoverable 
information.
    (1) At the meet and confer, the parties must use reasonable efforts 
to develop a Joint Discovery Plan that should contain the following 
elements:
    (i) The subjects on which discovery may be needed, when discovery 
should be completed, and whether discovery should be conducted in 
phases or be limited to, or focused on, particular issues;
    (ii) Any issues about disclosure, discovery, or preservation of 
electronically stored information (ESI), including the form or forms in 
which it should be produced;
    (iii) Provisions regarding any anticipated discovery of nonparties;
    (iv) Whether depositions are anticipated and the appropriate limits 
on the taking of such depositions, consistent with paragraph (e)(1) of 
this section, including the maximum number of depositions to be 
allowed;
    (v) The anticipated timing of the production of any document 
identifying and describing privileged documents that a party intends to 
redact or withhold from production; and
    (vi) Provisions regarding any inadvertent disclosure of privileged 
information.
    (2) The Joint Discovery Plan must comply with the provisions of 
this section and Sec.  308.24.
    (3) The parties must submit their proposed Joint Discovery Plan to 
the ALJ for review, modification, and/or approval. In the event the 
parties cannot agree to some or all of the provisions, the parties must 
file their respective proposals with the ALJ for resolution. After 
review, the ALJ must issue an approved Joint Discovery Plan, which must 
include any modifications made by the ALJ.
    (c) Document and electronically stored information (ESI) 
discovery--(1) Scope of document discovery. Parties to proceedings set 
forth at Sec.  308.1 and as provided in the Local Rules may obtain 
discovery through the production of documents and ESI.
    (2) Depositions to determine completeness of document production. 
Any counsel is permitted to depose a person producing documents or ESI 
pursuant to a document subpoena on the strictly limited topics of the 
identification of documents and ESI produced by that person, and a 
reasonable examination to determine whether the subpoenaed person made 
an adequate search for, and has produced, all subpoenaed documents and 
ESI.
    (3) Specific limitations on ESI discovery. A party need not provide 
discovery of ESI from sources that the party identifies as not 
reasonably accessible because of undue burden or cost. On motion to 
compel discovery or for a protective order, the party from whom 
discovery is sought must show that the information is not reasonably 
accessible because of undue burden or cost. If that showing is made, 
the ALJ may nonetheless order discovery from such sources if the 
requesting party shows good cause. The ALJ may specify conditions for 
the discovery.
    (4) Request for production. Consistent with the Joint Discovery 
Plan, a party may serve on any other party a request to produce 
documents, and permit the requesting party or its representative to 
inspect, copy, test, or sample documents in the responding party's 
possession, custody, or control.
    (5) Privilege. Consistent with Sec.  308.25(e) and the Joint 
Discovery Plan, and prior to the close of the discovery period set by 
the ALJ, the producing party must reasonably identify all documents 
withheld or redacted on the grounds of privilege and must produce a 
statement of the basis for the assertion of privilege.
    (6) Document subpoenas to nonparties. (i) The provisions of Sec.  
308.26 apply to document subpoenas to nonparties. Any requests for 
nonparty subpoenas must comply with Sec.  308.24(b) and the Joint 
Discovery Plan.
    (ii) If the ALJ determines that the application does not set forth 
a valid basis for the issuance of the subpoena, or that it does not 
otherwise comply with Sec.  308.24(b) or the Joint Discovery Plan, the 
ALJ may refuse to issue the subpoena or may issue it in a modified form 
upon such conditions as may be consistent with the Uniform Rules and 
the Local Rules.
    (d) Expert witness disclosures. (1) Required elements. When expert 
witness disclosures are required, the disclosures must include: name, 
mailing address, and electronic mail address of each expert witness:
    (i) If the expert is one retained or specially employed to provide 
expert testimony in the matter, or one whose duties as the party's 
employee regularly involve giving expert testimony, the witness must 
provide a written report in compliance with paragraph (d)(2)(i) of this 
section.
    (ii) If the expert is an employee of a party who does not regularly 
provide expert testimony, including a commissioned bank examiner 
employed by the FDIC, the witness must provide written disclosures in 
compliance with paragraph (d)(2)(ii) of this section.
    (2) Disclosure of expert testimony--(i) Witnesses who must provide 
written report. Unless otherwise stipulated or ordered by the ALJ, 
experts described in paragraph (d)(1)(i) of this section must prepare a 
signed expert report that contains:
    (A) A complete statement of all opinions the witness will express 
and the basis and reasons for them;
    (B) The facts or data considered by the witness in forming the 
opinions;
    (C) Any exhibits that will be used to summarize or support the 
opinions;
    (D) The witness' qualifications, including a list of all 
publications authored in the previous 10 years;
    (E) A list of all other cases in which, during the previous 4 
years, the witness testified as an expert at trial or by deposition; 
and
    (F) A statement of the compensation to be paid for the study and 
testimony in the case.
    (ii) Witnesses who provide written disclosures instead of a written 
report. Unless otherwise stipulated or ordered by the ALJ, expert 
witnesses described in paragraph (d)(1)(ii) of this section are not 
required to provide a written report, but must provide written 
disclosures that state:

[[Page 89949]]

    (A) The subject matter on which the witness is expected to present 
evidence; and
    (B) A summary of the facts and opinions to which the witness is 
expected to testify.
    (e) Depositions--(1) In general. In addition to paragraph (c)(2) of 
this section, and subject to the provisions of Sec.  308.24 and 
paragraph (a) of this section, a party may take depositions of 
individuals with direct knowledge of facts relevant to the proceeding 
and individuals designated as an expert under paragraph (d)(1) of this 
section, where the evidence sought cannot be obtained from some other 
source that is more convenient, less burdensome, or less expensive. 
Absent exceptional circumstances, depositions will only be permitted of 
individuals expected to testify at the hearing, including experts.
    (i) Limits on depositions. Unless otherwise stipulated by the 
parties, depositions are only permitted to the extent ordered by the 
ALJ upon a showing of good cause.
    (ii) Privileged matters. Privileged matters are not discoverable by 
deposition. Privileges include those set forth in Sec.  308.24(c).
    (iii) Report. A party must produce any disclosure required by 
paragraph (d)(2) of this section before the deposition of the witness 
required to provide such disclosure. Unless otherwise provided by the 
ALJ, the party must produce this report at least 20 days prior to any 
deposition of the witness.
    (2) Notice. A party desiring to take a deposition must give 
reasonable notice in writing to the deponent and to every other party 
to the proceeding. The notice must state the time, manner, and place 
for taking the deposition, and the name and address of the person to be 
deposed.
    (i) Location. A deposition notice may require the witness to be 
deposed at any place within a State, territory, or possession of the 
United States or the District of Columbia in which that witness resides 
or has a regular place of employment, or such other convenient place as 
agreed by the parties and the witness.
    (ii) Remote participation. The parties may stipulate, or the ALJ 
may order, that a deposition be taken by telephone or other remote 
means.
    (iii) Deposition subpoenas. A deponent's attendance may be 
compelled by subpoena.
    (A) Issuance. At the request of a party, the ALJ will issue a 
subpoena requiring the attendance of a witness at a deposition under 
this paragraph (e) unless the ALJ determines that the requested 
subpoena is outside the scope of paragraph (e)(1) of this section.
    (B) Service. The party requesting the subpoena must serve it on the 
person named therein, or on that person's counsel, by any of the 
methods identified in Sec.  308.11(d). The party serving the subpoena 
must file proof of service with the ALJ, unless the ALJ issues an order 
indicating the filing of proof of service is not required.
    (C) Objection to deposition subpoena. A motion to modify or quash a 
deposition subpoena must be in accordance with the procedures of Sec.  
308.27(b).
    (D) Enforcement of deposition subpoena. Enforcement of a deposition 
subpoena must be in accordance with the procedures of Sec.  
308.27(c)(2) and (d).
    (3) Time for taking depositions. A party may take depositions at 
any time after the issuance of the approved Joint Discovery Plan, but 
no later than 20 days before the scheduled hearing date, except with 
permission of the ALJ for good cause shown.
    (4) Conduct of the deposition. The witness must be duly sworn. By 
stipulation of the parties or by order of the ALJ, a court reporter or 
other person authorized to administer an oath may administer the oath 
remotely without being in the physical presence of the deponent. Unless 
the parties otherwise agree, all objections to questions or exhibits 
must be in short form and must state the grounds for the objection. 
Failure to object to questions or exhibits is not a waiver except when 
the grounds for the objection might have been avoided if the objection 
had been timely presented.
    (5) Duration. Unless otherwise stipulated by the parties or ordered 
by the ALJ, a deposition is limited to 1 day of 7 hours. The ALJ may, 
when it is consistent with Sec.  308.24 and paragraph (a) of this 
section, order additional time if it is necessary to fairly examine the 
witness, including when any person or circumstance has impeded the 
examination.
    (6) Recording the testimony--(i) Generally. The party taking the 
deposition must have a certified court reporter record the witness' 
testimony:
    (A) By stenotype machine or electronic means, such as by sound or 
video recording device;
    (B) Upon agreement of the parties, by any other method; or
    (C) For good cause and with leave of the ALJ, by any other method.
    (ii) Cost. The party taking the deposition must bear the cost of 
recording and transcribing the witness' testimony.
    (iii) Transcript. The court reporter must provide a transcript of 
the witness' testimony to the party taking the deposition and must make 
a copy of the transcript available to each party upon payment by that 
party of the cost of the copy. The transcript must be subscribed or 
certified in accordance with Sec.  308.27(c)(3).
    (f) Discovery motions--(1) Motions to limit discovery. In addition 
to Sec.  308.25(d), upon a motion by a party or on the ALJ's own 
motion, the ALJ must limit the frequency or extent of discovery 
otherwise allowed by this subpart if the ALJ determines that:
    (i) The discovery sought is unreasonably cumulative or duplicative 
or can be obtained from some other source that is more convenient, less 
burdensome, or less expensive;
    (ii) Involves privileged, irrelevant, or immaterial matters;
    (iii) The party seeking discovery has already had ample opportunity 
to obtain the information by discovery in the action; or
    (iv) The proposed discovery is outside the scope of this section or 
Sec.  308.24.
    (2) Motions to terminate depositions. At any time during a 
deposition, the deponent or a party may move to terminate or limit it 
on the ground that it is being conducted in bad faith or in a manner 
that unreasonably annoys, embarrasses, or oppresses the deponent or 
party. Upon such a motion, the ALJ may order that the deposition be 
terminated or may limit its scope and manner. If terminated, the 
deposition may be resumed only by order of the ALJ.
    (3) Motions to compel discovery. The provisions of Sec.  308.25(f) 
apply to any motion to compel discovery.

0
25. Appendix A, is added to read as follows:

Appendix A to Part 308--Rules of Practice and Procedure

    Note: This appendix is effective for all adjudicatory 
proceedings initiated prior to April 1, 2024. Cross-references to 12 
CFR part 308 (as well as to included sections) in this appendix are 
to those provisions as contained within this appendix.

Subpart A--Uniform Rules of Practice and Procedure.


Sec.  308.1  Scope.

    This subpart prescribes rules of practice and procedure applicable 
to adjudicatory proceedings as to which hearings on the record are 
provided for by the following statutory provisions:
    (a) Cease-and-desist proceedings under section 8(b) of the Federal

[[Page 89950]]

Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
    (b) Removal and prohibition proceedings under section 8(e) of the 
FDIA (12 U.S.C. 1818(e));
    (c) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) to determine whether the Federal Deposit 
Insurance Corporation (``FDIC''), should issue an order to approve or 
disapprove a person's proposed acquisition of an institution and/or 
institution holding company;
    (d) Proceedings under section 15C(c)(2) of the Securities Exchange 
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions 
upon any government securities broker or dealer or upon any person 
associated or seeking to become associated with a government securities 
broker or dealer for which the FDIC is the appropriate regulatory 
agency;
    (e) Assessment of civil money penalties by the FDIC against 
institutions, institution-affiliated parties, and certain other persons 
for which it is the appropriate regulatory agency for any violation of:
    (1) Sections 22(h) and 23 of the Federal Reserve Act (FRA), or any 
regulation issued thereunder, and certain unsafe or unsound practices 
or breaches of fiduciary duty, pursuant to 12 U.S.C. 1828(j) or 12 
U.S.C. 1468;
    (2) Section 106(b) of the Bank Holding Company Act Amendments of 
1970 (``BHCA Amendments of 1970''), and certain unsafe or unsound 
practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 
1972(2)(F);
    (3) Any provision of the Change in Bank Control Act of 1978, as 
amended (the ``CBCA''), or any regulation or order issued thereunder, 
and certain unsafe or unsound practices, or breaches of fiduciary duty, 
pursuant to 12 U.S.C. 1817(j)(16);
    (4) Section 7(a)(1) of the FDIA, pursuant to 12 U.S.C. 1817(a)(1);
    (5) Any provision of the International Lending Supervision Act of 
1983 (``ILSA''), or any rule, regulation or order issued thereunder, 
pursuant to 12 U.S.C. 3909;
    (6) Any provision of the International Banking Act of 1978 
(``IBA''), or any rule, regulation or order issued thereunder, pursuant 
to 12 U.S.C. 3108;
    (7) Certain provisions of the Exchange Act, pursuant to section 21B 
of the Exchange Act (15 U.S.C. 78u-2);
    (8) Section 1120 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (``FIRREA'') (12 U.S.C. 3349), or any order 
or regulation issued thereunder;
    (9) The terms of any final or temporary order issued under section 
8 of the FDIA or of any written agreement executed by the FDIC or the 
former Office of Thrift Supervision (OTS), the terms of any condition 
imposed in writing by the FDIC in connection with the grant of an 
application or request, certain unsafe or unsound practices or breaches 
of fiduciary duty, or any law or regulation not otherwise provided 
herein pursuant to 12 U.S.C. 1818(i)(2);
    (10) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder; and
    (11) Any provision of law referenced in 31 U.S.C. 5321 or any order 
or regulation issued thereunder;
    (12) Certain provisions of Section 5 of the Home Owners' Loan Act 
(HOLA) or any regulation or order issued thereunder, pursuant to 12 
U.S.C. 1464(d)(1), (5)-(8), (s), and (v);
    (13) Section 9 of the HOLA or any regulation or order issued 
thereunder, pursuant to 12 U.S.C. 1467(d);
    (14) Section 10 of HOLA, pursuant to 12 U.S.C. 1467a(a)(2)(D), (g), 
(i)(2)-(4) and (r); and
    (f) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g));
    (g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k)) 
to impose penalties for violations of the post-employment restrictions 
under that subsection; and
    (h) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in the Local 
Rules.


Sec.  308.2  Rules of construction.

    For purposes of this subpart:
    (a) Any term in the singular includes the plural, and the plural 
includes the singular, if such use would be appropriate;
    (b) Any use of a masculine, feminine, or neuter gender encompasses 
all three, if such use would be appropriate;
    (c) The term counsel includes a non-attorney representative; and
    (d) Unless the context requires otherwise, a party's counsel of 
record, if any, may, on behalf of that party, take any action required 
to be taken by the party.


Sec.  308.3  Definitions.

    For purposes of this subpart, unless explicitly stated to the 
contrary:
    Administrative law judge means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    Administrative Officer means an inferior officer of the Federal 
Deposit Insurance Corporation, duly appointed by the Board of Directors 
of the Federal Deposit Insurance Corporation to serve as the Board's 
designee to hear certain motions or requests in an adjudicatory 
proceeding and to be the official custodian of the record for the 
Federal Deposit Insurance Corporation.
    Adjudicatory proceeding means a proceeding conducted pursuant to 
these rules and leading to the formulation of a final order other than 
a regulation.
    Assistant Administrative Officer means an inferior officer of the 
Federal Deposit Insurance Corporation, duly appointed by the Board of 
Directors of the Federal Deposit Insurance Corporation to serve as the 
Board's designee to hear certain motions or requests in an adjudicatory 
proceeding upon the designation or unavailability of the Administrative 
Officer.
    Board of Directors or Board means the Board of Directors of the 
Federal Deposit Insurance Corporation or its designee.
    Decisional employee means any member of the Federal Deposit 
Insurance Corporation's or administrative law judge's staff who has not 
engaged in an investigative or prosecutorial role in a proceeding and 
who may assist the Board of Directors, the administrative law judge, or 
the Administrative Officer, or the Assistant Administrative Officer, in 
preparing orders, recommended decisions, decisions, and other documents 
under the Uniform Rules.
    Designee of the Board of Directors means officers or officials of 
the Federal Deposit Insurance Corporation acting pursuant to authority 
delegated by the Board of Directors.
    Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the FDIC in an adjudicatory 
proceeding.
    FDIC means the Federal Deposit Insurance Corporation.
    Final order means an order issued by the FDIC with or without the 
consent of the affected institution or the institution-affiliated 
party, that has become final, without regard to the pendency of any 
petition for reconsideration or review.
    Institution includes:
    (1) Any bank as that term is defined in section 3(a) of the FDIA 
(12 U.S.C. 1813(a));
    (2) Any bank holding company or any subsidiary (other than a bank) 
of a bank holding company as those terms are defined in the BHCA (12 
U.S.C. 1841 et seq.);

[[Page 89951]]

    (3) Any savings association as that term is defined in section 3(b) 
of the FDIA (12 U.S.C. 1813(b)), any savings and loan holding company 
or any subsidiary thereof (other than a bank) as those terms are 
defined in section 10(a) of the HOLA (12 U.S.C. 1467a(a));
    (4) Any organization operating under section 25 of the FRA (12 
U.S.C. 601 et seq.);
    (5) Any foreign bank or company to which section 8 of the IBA (12 
U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; 
and
    (6) Any federal agency as that term is defined in section 1(b) of 
the IBA (12 U.S.C. 3101(5)).
    Investigation means any investigation conducted pursuant to section 
10(c) of the FDIA or pursuant to section 5(d)(1)(B) of HOLA (12 U.S.C. 
1464(d)(1)(B)).
    Local Rules means those rules promulgated by the FDIC in those 
subparts of this part other than subpart A.
    Office of Financial Institution Adjudication (OFIA) means the 
executive body charged with overseeing the administration of 
administrative enforcement proceedings of the Office of the Comptroller 
of the Currency (OCC), the Board of Governors of the Federal Reserve 
Board (FRB), the FDIC, and the National Credit Union Administration 
(NCUA).
    Party means the FDIC and any person named as a party in any notice.
    Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency, or other entity or organization, including an 
institution as defined in this section.
    Respondent means any party other than the FDIC.
    Uniform Rules means those rules in subpart A of this part that 
pertain to the types of formal administrative enforcement actions set 
forth at Sec.  308.1 and as specified in subparts B through P of this 
part.
    Violation includes any action (alone or with another or others) for 
or toward causing, bringing about, participating in, counseling, or 
aiding or abetting a violation.


Sec.  308.4  Authority of Board of Directors.

    The Board of Directors may, at any time during the pendency of a 
proceeding, perform, direct the performance of, or waive performance 
of, any act which could be done or ordered by the administrative law 
judge.


Sec.  308.5  Authority of the administrative law judge.

    (a) General rule. All proceedings governed by this part shall be 
conducted in accordance with the provisions of chapter 5 of title 5 of 
the United States Code. The administrative law judge shall have all 
powers necessary to conduct a proceeding in a fair and impartial manner 
and to avoid unnecessary delay.
    (b) Powers. The administrative law judge shall have all powers 
necessary to conduct the proceeding in accordance with paragraph (a) of 
this section, including the following powers:
    (1) To administer oaths and affirmations;
    (2) To issue subpoenas, subpoenas duces tecum, and protective 
orders, as authorized by this part, and to quash or modify any such 
subpoenas and orders;
    (3) To receive relevant evidence and to rule upon the admission of 
evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
subpart;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling and/or pre-hearing conferences as set forth 
in Sec.  308.31;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the Board 
of Directors shall have the power to grant any motion to dismiss the 
proceeding or to decide any other motion that results in a final 
determination of the merits of the proceeding;
    (8) To prepare and present to the Board of Directors a recommended 
decision as provided herein;
    (9) To recuse himself or herself by motion made by a party or on 
his or her own motion;
    (10) To establish time, place and manner limitations on the 
attendance of the public and the media for any public hearing; and
    (11) To do all other things necessary and appropriate to discharge 
the duties of a presiding officer.


Sec.  308.6  Appearance and practice in adjudicatory proceedings.

    (a) Appearance before the FDIC or an administrative law judge--(1) 
By attorneys. Any member in good standing of the bar of the highest 
court of any state, commonwealth, possession, territory of the United 
States, or the District of Columbia may represent others before the 
FDIC if such attorney is not currently suspended or debarred from 
practice before the FDIC.
    (2) By non-attorneys. An individual may appear on his or her own 
behalf; a member of a partnership may represent the partnership; a duly 
authorized officer, director, or employee of any government unit, 
agency, institution, corporation or authority may represent that unit, 
agency, institution, corporation or authority if such officer; 
director, or employee is not currently suspended or debarred from 
practice before the FDIC.
    (3) Notice of appearance. Any individual acting as counsel on 
behalf of a party, including the FDIC, shall file a notice of 
appearance with OFIA at or before the time that individual submits 
papers or otherwise appears on behalf of a party in the adjudicatory 
proceeding. The notice of appearance must include a written declaration 
that the individual is currently qualified as provided in paragraph 
(a)(1) or (a)(2) of this section and is authorized to represent the 
particular party. By filing a notice of appearance on behalf of a party 
in an adjudicatory proceeding, the counsel agrees and represents that 
he or she is authorized to accept service on behalf of the represented 
party and that, in the event of withdrawal from representation, he or 
she will, if required by the administrative law judge, continue to 
accept service until new counsel has filed a notice of appearance or 
until the represented party indicates that he or she will proceed on a 
pro se basis.
    (b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or 
contumacious conduct at any phase of any adjudicatory proceeding may be 
grounds for exclusion or suspension of counsel from the proceeding.


Sec.  308.7  Good faith certification.

    (a) General requirement. Every filing or submission of record 
following the issuance of a notice shall be signed by at least one 
counsel of record in his or her individual name and shall state that 
counsel's address and telephone number. A party who acts as his or her 
own counsel shall sign his or her individual name and state his or her 
address and telephone number on every filing or submission of record.
    (b) Effect of signature. (1) The signature of counsel or a party 
shall constitute a certification that: The counsel or party has read 
the filing or submission of record; to the best of his or her 
knowledge, information, and belief formed after reasonable inquiry, the 
filing or submission of record is well-grounded in fact and is 
warranted by existing law or a good faith argument for the extension, 
modification, or reversal of existing law; and the filing or submission 
of record is not made for any improper purpose, such as to harass or to 
cause unnecessary delay or

[[Page 89952]]

needless increase in the cost of litigation.
    (2) If a filing or submission of record is not signed, the 
administrative law judge shall strike the filing or submission of 
record, unless it is signed promptly after the omission is called to 
the attention of the pleader or movant.
    (c) Effect of making oral motion or argument. The act of making any 
oral motion or oral argument by any counsel or party constitutes a 
certification that to the best of his or her knowledge, information, 
and belief formed after reasonable inquiry, his or her statements are 
well-grounded in fact and are warranted by existing law or a good faith 
argument for the extension, modification, or reversal of existing law, 
and are not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.


Sec.  308.8  Conflicts of interest.

    (a) Conflict of interest in representation. No person shall appear 
as counsel for another person in an adjudicatory proceeding if it 
reasonably appears that such representation may be materially limited 
by that counsel's responsibilities to a third person or by the 
counsel's own interests. The administrative law judge may take 
corrective measures at any stage of a proceeding to cure a conflict of 
interest in representation, including the issuance of an order limiting 
the scope of representation or disqualifying an individual from 
appearing in a representative capacity for the duration of the 
proceeding.
    (b) Certification and waiver. If any person appearing as counsel 
represents two or more parties to an adjudicatory proceeding or also 
represents a non-party on a matter relevant to an issue in the 
proceeding, counsel must certify in writing at the time of filing the 
notice of appearance required by Sec.  308.6(a):
    (1) That the counsel has personally and fully discussed the 
possibility of conflicts of interest with each such party and non-
party; and
    (2) That each such party and non-party waives any right it might 
otherwise have had to assert any known conflicts of interest or to 
assert any non-material conflicts of interest during the course of the 
proceeding.


Sec.  308.9  Ex parte communications.

    (a) Definition--(1) Ex parte communication means any material oral 
or written communication relevant to the merits of an adjudicatory 
proceeding that was neither on the record nor on reasonable prior 
notice to all parties that takes place between:
    (i) An interested person outside the FDIC (including such person's 
counsel); and
    (ii) The administrative law judge handling that proceeding, the 
Board of Directors, or a decisional employee.
    (2) Exception. A request for status of the proceeding does not 
constitute an ex parte communication.
    (b) Prohibition of ex parte communications. From the time the 
notice is issued by the FDIC until the date that the Board of Directors 
issues its final decision pursuant to Sec.  308.40(c):
    (1) No interested person outside the FDIC shall make or knowingly 
cause to be made an ex parte communication to any member of the Board 
of Directors, the administrative law judge, or a decisional employee; 
and
    (2) No member of the Board of Directors, no administrative law 
judge, or decisional employee shall make or knowingly cause to be made 
to any interested person outside the FDIC any ex parte communication.
    (c) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the administrative law judge, any 
member of the Board of Directors or other person identified in 
paragraph (a) of this section, that person shall cause all such written 
communications (or, if the communication is oral, a memorandum stating 
the substance of the communication) to be placed on the record of the 
proceeding and served on all parties. All other parties to the 
proceeding shall have an opportunity, within ten days of receipt of 
service of the ex parte communication, to file responses thereto and to 
recommend any sanctions that they believe to be appropriate under the 
circumstances. The administrative law judge or the Board of Directors 
shall then determine whether any action should be taken concerning the 
ex parte communication in accordance with paragraph (d) of this 
section.
    (d) Sanctions. Any party or his or her counsel who makes a 
prohibited ex parte communication, or who encourages or solicits 
another to make any such communication, may be subject to any 
appropriate sanction or sanctions imposed by the Board of Directors or 
the administrative law judge including, but not limited to, exclusion 
from the proceedings and an adverse ruling on the issue which is the 
subject of the prohibited communication.
    (e) Separation of functions. Except to the extent required for the 
disposition of ex parte matters as authorized by law, the 
administrative law judge may not consult a person or party on any 
matter relevant to the merits of the adjudication, unless on notice and 
opportunity for all parties to participate. An employee or agent 
engaged in the performance of investigative or prosecuting functions 
for the FDIC in a case may not, in that or a factually related case, 
participate or advise in the decision, recommended decision, or agency 
review of the recommended decision under Sec.  308.40 except as witness 
or counsel in public proceedings.


Sec.  308.10  Filing of papers.

    (a) Filing. Any papers required to be filed, excluding documents 
produced in response to a discovery request pursuant to Sec. Sec.  
308.25 and 308.26, shall be filed with the OFIA, except as otherwise 
provided.
    (b) Manner of filing. Unless otherwise specified by the Board of 
Directors or the administrative law judge, filing may be accomplished 
by:
    (1) Personal service;
    (2) Delivering the papers to a reliable commercial courier service, 
overnight delivery service, or to the U.S. Post Office for Express Mail 
delivery;
    (3) Mailing the papers by first class, registered, or certified 
mail; or
    (4) Transmission by electronic media, only if expressly authorized, 
and upon any conditions specified, by the Board of Directors or the 
administrative law judge. All papers filed by electronic media shall 
also concurrently be filed in accordance with paragraph (c) of this 
section.
    (c) Formal requirements as to papers filed--(1) Form. All papers 
filed must set forth the name, address, and telephone number of the 
counsel or party making the filing and must be accompanied by a 
certification setting forth when and how service has been made on all 
other parties. All papers filed must be double-spaced and printed or 
typewritten on 81-2 x 11 inch paper, and must be clear and legible.
    (2) Signature. All papers must be dated and signed as provided in 
Sec.  308.7.
    (3) Caption. All papers filed must include at the head thereof, or 
on a title page, the name of the FDIC and of the filing party, the 
title and docket number of the proceeding, and the subject of the 
particular paper.
    (4) Number of copies. Unless otherwise specified by the Board of 
Directors, or the administrative law judge, an original and one copy of 
all documents and papers shall be filed, except that only one copy of 
transcripts of testimony and exhibits shall be filed.

[[Page 89953]]

Sec.  308.11  Service of papers.

    (a) By the parties. Except as otherwise provided, a party filing 
papers shall serve a copy upon the counsel of record for all other 
parties to the proceeding so represented, and upon any party not so 
represented.
    (b) Method of service. Except as provided in paragraphs (c)(2) and 
(d) of this section, a serving party shall use one or more of the 
following methods of service:
    (1) Personal service;
    (2) Delivering the papers to a reliable commercial courier service, 
overnight delivery service, or to the U.S. Post Office for Express Mail 
delivery;
    (3) Mailing the papers by first class, registered, or certified 
mail; or
    (4) Transmission by electronic media, only if the parties mutually 
agree. Any papers served by electronic media shall also concurrently be 
served in accordance with the requirements of Sec.  308.10(c).
    (c) By the Board of Directors. (1) All papers required to be served 
by the Board of Directors or the administrative law judge upon a party 
who has appeared in the proceeding in accordance with Sec.  308.6, 
shall be served by any means specified in paragraph (b) of this 
section.
    (2) If a party has not appeared in the proceeding in accordance 
with Sec.  308.6, the Board of Directors or the administrative law 
judge shall make service by any of the following methods:
    (i) By personal service;
    (ii) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (iii) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
party;
    (iv) By registered or certified mail addressed to the party's last 
known address; or
    (v) By any other method reasonably calculated to give actual 
notice.
    (d) Subpoenas. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (3) By delivery to an agent which, in the case of a corporation or 
other association, is delivery to an officer, managing or general 
agent, or to any other agent authorized by appointment or by law to 
receive service and, if the agent is one authorized by statute to 
receive service and the statute so requires, by also mailing a copy to 
the party;
    (4) By registered or certified mail addressed to the person's last 
known address; or
    (5) In such other manner as is reasonably calculated to give actual 
notice.
    (e) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing is held, provided that if service is made on a 
foreign bank in connection with an action or proceeding involving one 
or more of its branches or agencies located in any state, territory, 
possession of the United States, or the District of Columbia, service 
shall be made on at least one branch or agency so involved.


Sec.  308.12  Construction of time limits.

    (a) General rule. In computing any period of time prescribed by 
this subpart, the date of the act or event that commences the 
designated period of time is not included. The last day so computed is 
included unless it is a Saturday, Sunday, or Federal holiday. When the 
last day is a Saturday, Sunday, or Federal holiday, the period runs 
until the end of the next day that is not a Saturday, Sunday, or 
Federal holiday. Intermediate Saturdays, Sundays, and Federal holidays 
are included in the computation of time. However, when the time period 
within which an act is to be performed is ten days or less, not 
including any additional time allowed for in paragraph (c) of this 
section, intermediate Saturdays, Sundays, and Federal holidays are not 
included.
    (b) When papers are deemed to be filed or served. (1) Filing and 
service are deemed to be effective:
    (i) In the case of personal service or same day commercial courier 
delivery, upon actual service;
    (ii) In the case of overnight commercial delivery service, U.S. 
Express Mail delivery, or first class, registered, or certified mail, 
upon deposit in or delivery to an appropriate point of collection;
    (iii) In the case of transmission by electronic media, as specified 
by the authority receiving the filing, in the case of filing, and as 
agreed among the parties, in the case of service.
    (2) The effective filing and service dates specified in paragraph 
(b)(1) of this section may be modified by the Board of Directors or 
administrative law judge in the case of filing or by agreement of the 
parties in the case of service.
    (c) Calculation of time for service and filing of responsive 
papers. Whenever a time limit is measured by a prescribed period from 
the service of any notice or paper, the applicable time limits are 
calculated as follows:
    (1) If service is made by first class, registered, or certified 
mail, add three calendar days to the prescribed period;
    (2) If service is made by express mail or overnight delivery 
service, add one calendar day to the prescribed period; or
    (3) If service is made by electronic media transmission, add one 
calendar day to the prescribed period, unless otherwise determined by 
the Board of Directors or the administrative law judge in the case of 
filing, or by agreement among the parties in the case of service.


Sec.  308.13  Change of time limits.

    Except as otherwise provided by law, the administrative law judge 
may, for good cause shown, extend the time limits prescribed by the 
Uniform Rules or by any notice or order issued in the proceedings. 
After the referral of the case to the Board of Directors pursuant to 
Sec.  308.38, the Board of Directors may grant extensions of the time 
limits for good cause shown. Extensions may be granted at the motion of 
a party or of the Board of Directors after notice and opportunity to 
respond is afforded all non-moving parties, or on the administrative 
law judge's own motion.


Sec.  308.14  Witness fees and expenses.

    Witnesses subpoenaed for testimony or depositions shall be paid the 
same fees for attendance and mileage as are paid in the United States 
district courts in proceedings in which the United States is a party, 
provided that, in the case of a discovery subpoena addressed to a 
party, no witness fees or mileage need be paid. Fees for witnesses 
shall be tendered in advance by the party requesting the subpoena, 
except that fees and mileage need not be tendered in advance where the 
FDIC is the party requesting the subpoena. The FDIC shall not be 
required to pay any fees to, or expenses of, any witness not subpoenaed 
by the FDIC.


Sec.  308.15  Opportunity for informal settlement.

    Any respondent may, at any time in the proceeding, unilaterally 
submit to

[[Page 89954]]

Enforcement Counsel written offers or proposals for settlement of a 
proceeding, without prejudice to the rights of any of the parties. No 
such offer or proposal shall be made to any FDIC representative other 
than Enforcement Counsel. Submission of a written settlement offer does 
not provide a basis for adjourning or otherwise delaying all or any 
portion of a proceeding under this part. No settlement offer or 
proposal, or any subsequent negotiation or resolution, is admissible as 
evidence in any proceeding.


Sec.  308.16  FDIC's right to conduct examination.

    Nothing contained in this subpart limits in any manner the right of 
the FDIC to conduct any examination, inspection, or visitation of any 
institution or institution-affiliated party, or the right of the FDIC 
to conduct or continue any form of investigation authorized by law.


Sec.  308.17  Collateral attacks on adjudicatory proceeding.

    If an interlocutory appeal or collateral attack is brought in any 
court concerning all or any part of an adjudicatory proceeding, the 
challenged adjudicatory proceeding shall continue without regard to the 
pendency of that court proceeding. No default or other failure to act 
as directed in the adjudicatory proceeding within the times prescribed 
in this subpart shall be excused based on the pendency before any court 
of any interlocutory appeal or collateral attack.


Sec.  308.18  Commencement of proceeding and contents of notice.

    (a) Commencement of proceeding. (1)(i) Except for change-in-control 
proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), a 
proceeding governed by this subpart is commenced by issuance of a 
notice by the FDIC.
    (ii) The notice must be served by Enforcement Counsel upon the 
respondent and given to any other appropriate financial institution 
supervisory authority where required by law.
    (iii) The notice must be filed with the OFIA.
    (2) Change-in-control proceedings under section 7(j)(4) of the FDIA 
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the 
FDIC.
    (b) Contents of notice. The notice must set forth:
    (1) The legal authority for the proceeding and for the FDIC's 
jurisdiction over the proceeding;
    (2) A statement of the matters of fact or law showing that the FDIC 
is entitled to relief;
    (3) A proposed order or prayer for an order granting the requested 
relief;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as required by law or 
regulation;
    (6) The time within which to request a hearing as required by law 
or regulation; and
    (7) That the answer and/or request for a hearing shall be filed 
with OFIA.


Sec.  308.19  Answer.

    (a) When. Within 20 days of service of the notice, respondent shall 
file an answer as designated in the notice. In a civil money penalty 
proceeding, respondent shall also file a request for a hearing within 
20 days of service of the notice.
    (b) Content of answer. An answer must specifically respond to each 
paragraph or allegation of fact contained in the notice and must admit, 
deny, or state that the party lacks sufficient information to admit or 
deny each allegation of fact. A statement of lack of information has 
the effect of a denial. Denials must fairly meet the substance of each 
allegation of fact denied; general denials are not permitted. When a 
respondent denies part of an allegation, that part must be denied and 
the remainder specifically admitted. Any allegation of fact in the 
notice which is not denied in the answer must be deemed admitted for 
purposes of the proceeding. A respondent is not required to respond to 
the portion of a notice that constitutes the prayer for relief or 
proposed order. The answer must set forth affirmative defenses, if any, 
asserted by the respondent.
    (c) Default--(1) Effect of failure to answer. Failure of a 
respondent to file an answer required by this section within the time 
provided constitutes a waiver of his or her right to appear and contest 
the allegations in the notice. If no timely answer is filed, 
Enforcement Counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the administrative law judge shall file with the 
Board of Directors a recommended decision containing the findings and 
the relief sought in the notice. Any final order issued by the Board of 
Directors based upon a respondent's failure to answer is deemed to be 
an order issued upon consent.
    (2) Effect of failure to request a hearing in civil money penalty 
proceedings. If respondent fails to request a hearing as required by 
law within the time provided, the notice of assessment constitutes a 
final and unappealable order.


Sec.  308.20  Amended pleadings.

    (a) Amendments. The notice or answer may be amended or supplemented 
at any stage of the proceeding. The respondent must answer an amended 
notice within the time remaining for the respondent's answer to the 
original notice, or within ten days after service of the amended 
notice, whichever period is longer, unless the Board of Directors or 
administrative law judge orders otherwise for good cause.
    (b) Amendments to conform to the evidence. When issues not raised 
in the notice or answer are tried at the hearing by express or implied 
consent of the parties, they will be treated in all respects as if they 
had been raised in the notice or answer, and no formal amendments are 
required. If evidence is objected to at the hearing on the ground that 
it is not within the issues raised by the notice or answer, the 
administrative law judge may admit the evidence when admission is 
likely to assist in adjudicating the merits of the action and the 
objecting party fails to satisfy the administrative law judge that the 
admission of such evidence would unfairly prejudice that party's action 
or defense upon the merits. The administrative law judge may grant a 
continuance to enable the objecting party to meet such evidence.


Sec.  308.21  Failure to appear.

    Failure of a respondent to appear in person at the hearing or by a 
duly authorized counsel constitutes a waiver of respondent's right to a 
hearing and is deemed an admission of the facts as alleged and consent 
to the relief sought in the notice. Without further proceedings or 
notice to the respondent, the administrative law judge shall file with 
the Board of Directors a recommended decision containing the findings 
and the relief sought in the notice.


Sec.  308.22  Consolidation and severance of actions.

    (a) Consolidation. (1) On the motion of any party, or on the 
administrative law judge's own motion, the administrative law judge may 
consolidate, for some or all purposes, any two or more proceedings, if 
each such proceeding involves or arises out of the same transaction, 
occurrence or series of transactions or occurrences, or involves at 
least one common respondent or a material common question of law or 
fact, unless such

[[Page 89955]]

consolidation would cause unreasonable delay or injustice.
    (2) In the event of consolidation under paragraph (a)(1) of this 
section, appropriate adjustment to the prehearing schedule must be made 
to avoid unnecessary expense, inconvenience, or delay.
    (b) Severance. The administrative law judge may, upon the motion of 
any party, sever the proceeding for separate resolution of the matter 
as to any respondent only if the administrative law judge finds that:
    (1) Undue prejudice or injustice to the moving party would result 
from not severing the proceeding; and
    (2) Such undue prejudice or injustice would outweigh the interests 
of judicial economy and expedition in the complete and final resolution 
of the proceeding.


Sec.  308.23  Motions.

    (a) In writing. (1) Except as otherwise provided herein, an 
application or request for an order or ruling must be made by written 
motion.
    (2) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.
    (3) No oral argument may be held on written motions except as 
otherwise directed by the administrative law judge. Written memoranda, 
briefs, affidavits or other relevant material or documents may be filed 
in support of or in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the administrative law judge directs that such motion be reduced to 
writing.
    (c) Filing of motions. Motions must be filed with the 
administrative law judge, except that following the filing of the 
recommended decision, motions must be filed with the Administrative 
Officer for disposition by the Board of Directors.
    (d) Responses. (1) Except as otherwise provided in this paragraph 
(d), within ten days after service of any written motion, or within 
such other period of time as may be established by the administrative 
law judge or the Administrative Officer, any party may file a written 
response to a motion. The administrative law judge shall not rule on 
any oral or written motion before each party has had an opportunity to 
file a response.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed a consent by that party to the 
entry of an order substantially in the form of the order accompanying 
the motion.
    (e) Dilatory motions. Frivolous, dilatory or repetitive motions are 
prohibited. The filing of such motions may form the basis for 
sanctions.
    (f) Dispositive motions. Dispositive motions are governed by 
Sec. Sec.  308.29 and 308.30.


Sec.  308.24  Scope of document discovery.

    (a) Limits on discovery. (1) Subject to the limitations set out in 
paragraphs (b), (c), and (d) of this section, a party to a proceeding 
under this subpart may obtain document discovery by serving a written 
request to produce documents. For purposes of a request to produce 
documents, the term ``documents'' may be defined to include drawings, 
graphs, charts, photographs, recordings, data stored in electronic 
form, and other data compilations from which information can be 
obtained, or translated, if necessary, by the parties through detection 
devices into reasonably usable form, as well as written material of all 
kinds.
    (2) Discovery by use of deposition is governed by subpart I of this 
part.
    (3) Discovery by use of interrogatories is not permitted.
    (b) Relevance. A party may obtain document discovery regarding any 
matter, not privileged, that has material relevance to the merits of 
the pending action. Any request to produce documents that calls for 
irrelevant material, that is unreasonable, oppressive, excessive in 
scope, unduly burdensome, or repetitive of previous requests, or that 
seeks to obtain privileged documents will be denied or modified. A 
request is unreasonable, oppressive, excessive in scope or unduly 
burdensome if, among other things, it fails to include justifiable 
limitations on the time period covered and the geographic locations to 
be searched, the time provided to respond in the request is inadequate, 
or the request calls for copies of documents to be delivered to the 
requesting party and fails to include the requestor's written agreement 
to pay in advance for the copying, in accordance with Sec.  308.25.
    (c) Privileged matter. Privileged documents are not discoverable. 
Privileges include the attorney-client privilege, work-product 
privilege, any government's or government agency's deliberative-process 
privilege, and any other privileges the Constitution, any applicable 
act of Congress, or the principles of common law provide.
    (d) Time limits. All discovery, including all responses to 
discovery requests, shall be completed at least 20 days prior to the 
date scheduled for the commencement of the hearing. No exceptions to 
this time limit shall be permitted, unless the administrative law judge 
finds on the record that good cause exists for waiving the requirements 
of this paragraph.


Sec.  308.25  Request for document discovery from parties.

    (a) General rule. Any party may serve on any other party a request 
to produce for inspection any discoverable documents that are in the 
possession, custody, or control of the party upon whom the request is 
served. The request must identify the documents to be produced either 
by individual item or by category, and must describe each item and 
category with reasonable particularity. Documents must be produced as 
they are kept in the usual course of business or must be organized to 
correspond with the categories in the request.
    (b) Production or copying. The request must specify a reasonable 
time, place, and manner for production and performing any related acts. 
In lieu of inspecting the documents, the requesting party may specify 
that all or some of the responsive documents be copied and the copies 
delivered to the requesting party. If copying of fewer than 250 pages 
is requested, the party to whom the request is addressed shall bear the 
cost of copying and shipping charges. If a party requests 250 pages or 
more of copying, the requesting party shall pay for the copying and 
shipping charges. Copying charges are the current per page copying rate 
imposed by 12 CFR part 309 implementing the Freedom of Information Act 
(5 U.S.C. 552). The party to whom the request is addressed may require 
payment in advance before producing the documents.
    (c) Obligation to update responses. A party who has responded to a 
discovery request with a response that was complete when made is not 
required to supplement the response to include documents thereafter 
acquired, unless the responding party learns that:
    (1) The response was materially incorrect when made; or
    (2) The response, though correct when made, is no longer true and a 
failure to amend the response is, in substance, a knowing concealment.
    (d) Motions to limit discovery. (1) Any party that objects to a 
discovery request may, within ten days of being served with such 
request, file a motion in accordance with the provisions of Sec.  
308.23 to strike or otherwise limit the request. If an objection is 
made to only a portion of an item or category in a request, the portion 
objected to shall be specified. Any objections not made in

[[Page 89956]]

accordance with this paragraph and Sec.  308.23 are waived.
    (2) The party who served the request that is the subject of a 
motion to strike or limit may file a written response within five days 
of service of the motion. No other party may file a response.
    (e) Privilege. At the time other documents are produced, the 
producing party must reasonably identify all documents withheld on the 
grounds of privilege and must produce a statement of the basis for the 
assertion of privilege. When similar documents that are protected by 
deliberative process, attorney-work-product, or attorney-client 
privilege are voluminous, these documents may be identified by category 
instead of by individual document. The administrative law judge retains 
discretion to determine when the identification by category is 
insufficient.
    (f) Motions to compel production. (1) If a party withholds any 
documents as privileged or fails to comply fully with a discovery 
request, the requesting party may, within ten days of the assertion of 
privilege or of the time the failure to comply becomes known to the 
requesting party, file a motion in accordance with the provisions of 
Sec.  308.23 for the issuance of a subpoena compelling production.
    (2) The party who asserted the privilege or failed to comply with 
the request may file a written response to a motion to compel within 
five days of service of the motion. No other party may file a response.
    (g) Ruling on motions. After the time for filing responses pursuant 
to this section has expired, the administrative law judge shall rule 
promptly on all motions filed pursuant to this section. If the 
administrative law judge determines that a discovery request, or any of 
its terms, calls for irrelevant material, is unreasonable, oppressive, 
excessive in scope, unduly burdensome, or repetitive of previous 
requests, or seeks to obtain privileged documents, he or she may deny 
or modify the request, and may issue appropriate protective orders, 
upon such conditions as justice may require. The pendency of a motion 
to strike or limit discovery or to compel production is not a basis for 
staying or continuing the proceeding, unless otherwise ordered by the 
administrative law judge. Notwithstanding any other provision in this 
part, the administrative law judge may not release, or order a party to 
produce, documents withheld on grounds of privilege if the party has 
stated to the administrative law judge its intention to file a timely 
motion for interlocutory review of the administrative law judge's order 
to produce the documents, and until the motion for interlocutory review 
has been decided.
    (h) Enforcing discovery subpoenas. If the administrative law judge 
issues a subpoena compelling production of documents by a party, the 
subpoenaing party may, in the event of noncompliance and to the extent 
authorized by applicable law, apply to any appropriate United States 
district court for an order requiring compliance with the subpoena. A 
party's right to seek court enforcement of a subpoena shall not in any 
manner limit the sanctions that may be imposed by the administrative 
law judge against a party who fails to produce subpoenaed documents.


Sec.  308.26  Document subpoenas to nonparties.

    (a) General rules. (1) Any party may apply to the administrative 
law judge for the issuance of a document discovery subpoena addressed 
to any person who is not a party to the proceeding. The application 
must contain a proposed document subpoena and a brief statement showing 
the general relevance and reasonableness of the scope of documents 
sought. The subpoenaing party shall specify a reasonable time, place, 
and manner for making production in response to the document subpoena.
    (2) A party shall only apply for a document subpoena under this 
section within the time period during which such party could serve a 
discovery request under Sec.  308.24(d). The party obtaining the 
document subpoena is responsible for serving it on the subpoenaed 
person and for serving copies on all parties. Document subpoenas may be 
served in any state, territory, or possession of the United States, the 
District of Columbia, or as otherwise provided by law.
    (3) The administrative law judge shall promptly issue any document 
subpoena requested pursuant to this section. If the administrative law 
judge determines that the application does not set forth a valid basis 
for the issuance of the subpoena, or that any of its terms are 
unreasonable, oppressive, excessive in scope, or unduly burdensome, he 
or she may refuse to issue the subpoena or may issue it in a modified 
form upon such conditions as may be consistent with the Uniform Rules.
    (b) Motion to quash or modify. (1) Any person to whom a document 
subpoena is directed may file a motion to quash or modify such 
subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant shall serve the motion on all 
parties, and any party may respond to such motion within ten days of 
service of the motion.
    (2) Any motion to quash or modify a document subpoena must be filed 
on the same basis, including the assertion of privilege, upon which a 
party could object to a discovery request under Sec.  308.25(d), and 
during the same time limits during which such an objection could be 
filed.
    (c) Enforcing document subpoenas. If a subpoenaed person fails to 
comply with any subpoena issued pursuant to this section or any order 
of the administrative law judge which directs compliance with all or 
any portion of a document subpoena, the subpoenaing party or any other 
aggrieved party may, to the extent authorized by applicable law, apply 
to an appropriate United States district court for an order requiring 
compliance with so much of the document subpoena as the administrative 
law judge has not quashed or modified. A party's right to seek court 
enforcement of a document subpoena shall in no way limit the sanctions 
that may be imposed by the administrative law judge on a party who 
induces a failure to comply with subpoenas issued under this section.


Sec.  308.27  Deposition of witness unavailable for hearing.

    (a) General rules. (1) If a witness will not be available for the 
hearing, a party desiring to preserve that witness' testimony for the 
record may apply in accordance with the procedures set forth in 
paragraph (a)(2) of this section, to the administrative law judge for 
the issuance of a subpoena, including a subpoena duces tecum, requiring 
the attendance of the witness at a deposition. The administrative law 
judge may issue a deposition subpoena under this section upon showing 
that:
    (i) The witness will be unable to attend or may be prevented from 
attending the hearing because of age, sickness or infirmity, or will 
otherwise be unavailable;
    (ii) The witness' unavailability was not procured or caused by the 
subpoenaing party;
    (iii) The testimony is reasonably expected to be material; and
    (iv) Taking the deposition will not result in any undue burden to 
any other party and will not cause undue delay of the proceeding.
    (2) The application must contain a proposed deposition subpoena and 
a brief statement of the reasons for the issuance of the subpoena. The 
subpoena must name the witness whose deposition is to be taken and 
specify the time and place for taking the deposition.

[[Page 89957]]

A deposition subpoena may require the witness to be deposed at any 
place within the country in which that witness resides or has a regular 
place of employment or such other convenient place as the 
administrative law judge shall fix.
    (3) Any requested subpoena that sets forth a valid basis for its 
issuance must be promptly issued, unless the administrative law judge 
on his or her own motion, requires a written response or requires 
attendance at a conference concerning whether the requested subpoena 
should be issued.
    (4) The party obtaining a deposition subpoena is responsible for 
serving it on the witness and for serving copies on all parties. Unless 
the administrative law judge orders otherwise, no deposition under this 
section shall be taken on fewer than ten days' notice to the witness 
and all parties. Deposition subpoenas may be served in any state, 
territory, possession of the United States, or the District of 
Columbia, on any person or company doing business in any state, 
territory, possession of the United States, or the District of 
Columbia, or as otherwise permitted by law.
    (b) Objections to deposition subpoenas. (1) The witness and any 
party who has not had an opportunity to oppose a deposition subpoena 
issued under this section may file a motion with the administrative law 
judge to quash or modify the subpoena prior to the time for compliance 
specified in the subpoena, but not more than ten days after service of 
the subpoena.
    (2) A statement of the basis for the motion to quash or modify a 
subpoena issued under this section must accompany the motion. The 
motion must be served on all parties.
    (c) Procedure upon deposition. (1) Each witness testifying pursuant 
to a deposition subpoena must be duly sworn, and each party shall have 
the right to examine the witness. Objections to questions or documents 
must be in short form, stating the grounds for the objection. Failure 
to object to questions or documents is not deemed a waiver except where 
the ground for the objection might have been avoided if the objection 
had been timely presented. All questions, answers, and objections must 
be recorded.
    (2) Any party may move before the administrative law judge for an 
order compelling the witness to answer any questions the witness has 
refused to answer or submit any evidence the witness has refused to 
submit during the deposition.
    (3) The deposition must be subscribed by the witness, unless the 
parties and the witness, by stipulation, have waived the signing, or 
the witness is ill, cannot be found, or has refused to sign. If the 
deposition is not subscribed by the witness, the court reporter taking 
the deposition shall certify that the transcript is a true and complete 
transcript of the deposition.
    (d) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any order of the administrative law judge which directs compliance 
with all or any portion of a deposition subpoena under paragraph (b) or 
(c)(3) of this section, the subpoenaing party or other aggrieved party 
may, to the extent authorized by applicable law, apply to an 
appropriate United States district court for an order requiring 
compliance with the portions of the subpoena that the administrative 
law judge has ordered enforced. A party's right to seek court 
enforcement of a deposition subpoena in no way limits the sanctions 
that may be imposed by the administrative law judge on a party who 
fails to comply with, or procures a failure to comply with, a subpoena 
issued under this section.


Sec.  308.28  Interlocutory review.

    (a) General rule. The Board of Directors may review a ruling of the 
administrative law judge prior to the certification of the record to 
the Board of Directors only in accordance with the procedures set forth 
in this section and Sec.  308.23.
    (b) Scope of review. The Board of Directors may exercise 
interlocutory review of a ruling of, the administrative law judge if 
the Board of Directors finds that:
    (1) The ruling involves a controlling question of law or policy as 
to which substantial grounds exist for a difference of opinion;
    (2) Immediate review of the ruling may materially advance the 
ultimate termination of the proceeding;
    (3) Subsequent modification of the ruling at the conclusion of the 
proceeding would be an inadequate remedy; or
    (4) Subsequent modification of the ruling would cause unusual delay 
or expense.
    (c) Procedure. Any request for interlocutory review shall be filed 
by a party with the administrative law judge within ten days of his or 
her ruling and shall otherwise comply with Sec.  308.23. Any party may 
file a response to a request for interlocutory review in accordance 
with Sec.  308.23(d). Upon the expiration of the time for filing all 
responses, the administrative law judge shall refer the matter to the 
Board of Directors for final disposition.
    (d) Suspension of proceeding. Neither a request for interlocutory 
review nor any disposition of such a request by the Board of Directors 
under this section suspends or stays the proceeding unless otherwise 
ordered by the administrative law judge or the Board of Directors.


Sec.  308.29  Summary disposition.

    (a) In general. The administrative law judge shall recommend that 
the Board of Directors issue a final order granting a motion for 
summary disposition if the undisputed pleaded facts, admissions, 
affidavits, stipulations, documentary evidence, matters as to which 
official notice may be taken, and any other evidentiary materials 
properly submitted in connection with a motion for summary disposition 
show that:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.
    (b) Filing of motions and responses. (1) Any party who believes 
that there is no genuine issue of material fact to be determined and 
that he or she is entitled to a decision as a matter of law may move at 
any time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 days after service of such a motion, 
or within such time period as allowed by the administrative law judge, 
may file a response to such motion.
    (2) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, investigatory depositions, transcripts, 
affidavits and any other evidentiary materials that the moving party 
contends support his or her position. The motion must also be 
accompanied by a brief containing the points and authorities in support 
of the contention of the moving party. Any party opposing a motion for 
summary disposition must file a statement setting forth those material 
facts as to which he or she contends a genuine dispute exists. Such 
opposition must be supported by evidence of the same type as that 
submitted with the motion for summary disposition and a brief 
containing the points and authorities in support of the contention that 
summary disposition would be inappropriate.
    (c) Hearing on motion. At the request of any party or on his or her 
own motion, the administrative law judge may hear oral argument on the 
motion for summary disposition.

[[Page 89958]]

    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the administrative law judge 
shall determine whether the moving party is entitled to summary 
disposition. If the administrative law judge determines that summary 
disposition is warranted, the administrative law judge shall submit a 
recommended decision to that effect to the Board of Directors. If the 
administrative law judge finds that no party is entitled to summary 
disposition, he or she shall make a ruling denying the motion.


Sec.  308.30  Partial summary disposition.

    If the administrative law judge determines that a party is entitled 
to summary disposition as to certain claims only, he or she shall defer 
submitting a recommended decision as to those claims. A hearing on the 
remaining issues must be ordered. Those claims for which the 
administrative law judge has determined that summary disposition is 
warranted will be addressed in the recommended decision filed at the 
conclusion of the hearing.


Sec.  308.31  Scheduling and prehearing conferences.

    (a) Scheduling conference. Within 30 days of service of the notice 
or order commencing a proceeding or such other time as parties may 
agree, the administrative law judge shall direct counsel for all 
parties to meet with him or her in person at a specified time and place 
prior to the hearing or to confer by telephone for the purpose of 
scheduling the course and conduct of the proceeding. This meeting or 
telephone conference is called a ``scheduling conference.'' The 
identification of potential witnesses, the time for and manner of 
discovery, and the exchange of any prehearing materials including 
witness lists, statements of issues, stipulations, exhibits and any 
other materials may also be determined at the scheduling conference.
    (b) Prehearing conferences. The administrative law judge may, in 
addition to the scheduling conference, on his or her own motion or at 
the request of any party, direct counsel for the parties to meet with 
him or her (in person or by telephone) at a prehearing conference to 
address any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, 
authenticity and admissibility into evidence of documents;
    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes;
    (7) Amendments to pleadings; and
    (8) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (c) Transcript. The administrative law judge, in his or her 
discretion, may require that a scheduling or prehearing conference be 
recorded by a court reporter. A transcript of the conference and any 
materials filed, including orders, becomes part of the record of the 
proceeding. A party may obtain a copy of the transcript at his or her 
expense.
    (d) Scheduling or prehearing orders. At or within a reasonable time 
following the conclusion of the scheduling conference or any prehearing 
conference, the administrative law judge shall serve on each party an 
order setting forth any agreements reached and any procedural 
determinations made.


Sec.  308.32  Prehearing submissions.

    (a) Within the time set by the administrative law judge, but in no 
case later than 14 days before the start of the hearing, each party 
shall serve on every other party, his or her:
    (1) Prehearing statement;
    (2) Final list of witnesses to be called to testify at the hearing, 
including name and address of each witness and a short summary of the 
expected testimony of each witness;
    (3) List of the exhibits to be introduced at the hearing along with 
a copy of each exhibit; and
    (4) Stipulations of fact, if any.
    (b) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraph (a) of 
this section, except for good cause shown.


Sec.  308.33  Public hearings.

    (a) General rule. All hearings shall be open to the public, unless 
the FDIC, in its discretion, determines that holding an open hearing 
would be contrary to the public interest. Within 20 days of service of 
the notice or, in the case of change-in-control proceedings under 
section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), within 20 days from 
service of the hearing order, any respondent may file with the 
Administrative Officer a request for a private hearing, and any party 
may file a reply to such a request. A party must serve on the 
administrative law judge a copy of any request or reply the party files 
with the Administrative Officer. The form of, and procedure for, these 
requests and replies are governed by Sec.  308.23. A party's failure to 
file a request or a reply constitutes a waiver of any objections 
regarding whether the hearing will be public or private.
    (b) Filing document under seal. Enforcement Counsel, in his or her 
discretion, may file any document or part of a document under seal if 
disclosure of the document would be contrary to the public interest. 
The administrative law judge shall take all appropriate steps to 
preserve the confidentiality of such documents or parts thereof, 
including closing portions of the hearing to the public.


Sec.  308.34  Hearing subpoenas.

    (a) Issuance. (1) Upon application of a party showing general 
relevance and reasonableness of scope of the testimony or other 
evidence sought, the administrative law judge may issue a subpoena or a 
subpoena duces tecum requiring the attendance of a witness at the 
hearing or the production of documentary or physical evidence at the 
hearing. The application for a hearing subpoena must also contain a 
proposed subpoena specifying the attendance of a witness or the 
production of evidence from any state, territory, or possession of the 
United States, the District of Columbia, or as otherwise provided by 
law at any designated place where the hearing is being conducted. The 
party making the application shall serve a copy of the application and 
the proposed subpoena on every other party.
    (2) A party may apply for a hearing subpoena at any time before the 
commencement of a hearing. During a hearing, a party may make an 
application for a subpoena orally on the record before the 
administrative law judge.
    (3) The administrative law judge shall promptly issue any hearing 
subpoena requested pursuant to this section. If the administrative law 
judge determines that the application does not set forth a valid basis 
for the issuance of the subpoena, or that any of its terms are 
unreasonable, oppressive, excessive in scope, or unduly burdensome, he 
or she may refuse to issue the subpoena or may issue it in a modified 
form upon any conditions consistent with this subpart. Upon issuance by 
the administrative law judge, the party making the application shall 
serve the subpoena on the person named in the subpoena and on each 
party.

[[Page 89959]]

    (b) Motion to quash or modify. (1) Any person to whom a hearing 
subpoena is directed or any party may file a motion to quash or modify 
the subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant must serve the motion on each party 
and on the person named in the subpoena. Any party may respond to the 
motion within ten days of service of the motion.
    (2) Any motion to quash or modify a hearing subpoena must be filed 
prior to the time specified in the subpoena for compliance, but not 
more than ten days after the date of service of the subpoena upon the 
movant.
    (c) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section or any order of the 
administrative law judge which directs compliance with all or any 
portion of a document subpoena, the subpoenaing party or any other 
aggrieved party may seek enforcement of the subpoena pursuant to Sec.  
308.26(c).


Sec.  308.35  Conduct of hearings.

    (a) General rules. (1) Hearings shall be conducted so as to provide 
a fair and expeditious presentation of the relevant disputed issues. 
Each party has the right to present its case or defense by oral and 
documentary evidence and to conduct such cross examination as may be 
required for full disclosure of the facts.
    (2) Order of hearing. Enforcement Counsel shall present its case-
in-chief first, unless otherwise ordered by the administrative law 
judge, or unless otherwise expressly specified by law or regulation. 
Enforcement Counsel shall be the first party to present an opening 
statement and a closing statement, and may make a rebuttal statement 
after the respondent's closing statement. If there are multiple 
respondents, respondents may agree among themselves as to their order 
of presentation of their cases, but if they do not agree the 
administrative law judge shall fix the order.
    (3) Examination of witnesses. Only one counsel for each party may 
conduct an examination of a witness, except that in the case of 
extensive direct examination, the administrative law judge may permit 
more than one counsel for the party presenting the witness to conduct 
the examination. A party may have one counsel conduct the direct 
examination and another counsel conduct re-direct examination of a 
witness, or may have one counsel conduct the cross examination of a 
witness and another counsel conduct the re-cross examination of a 
witness.
    (4) Stipulations. Unless the administrative law judge directs 
otherwise, all stipulations of fact and law previously agreed upon by 
the parties, and all documents, the admissibility of which have been 
previously stipulated, will be admitted into evidence upon commencement 
of the hearing.
    (b) Transcript. The hearing must be recorded and transcribed. The 
reporter will make the transcript available to any party upon payment 
by that party to the reporter of the cost of the transcript. The 
administrative law judge may order the record corrected, either upon 
motion to correct, upon stipulation of the parties, or following notice 
to the parties upon the administrative law judge's own motion.


Sec.  308.36  Evidence.

    (a) Admissibility. (1) Except as is otherwise set forth in this 
section, relevant, material, and reliable evidence that is not unduly 
repetitive is admissible to the fullest extent authorized by the 
Administrative Procedure Act and other applicable law.
    (2) Evidence that would be admissible under the Federal Rules of 
Evidence is admissible in a proceeding conducted pursuant to this 
subpart.
    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence may not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant, 
material, reliable and not unduly repetitive.
    (b) Official notice. (1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court and any material information in the official public 
records of any Federal or state government agency.
    (2) All matters officially noticed by the administrative law judge 
or Board of Directors shall appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, shall be afforded an opportunity to 
object.
    (c) Documents. (1) A duplicate copy of a document is admissible to 
the same extent as the original, unless a genuine issue is raised as to 
whether the copy is in some material respect not a true and legible 
copy of the original.
    (2) Subject to the requirements of paragraph (a) of this section, 
any document, including a report of examination, supervisory activity, 
inspection or visitation, prepared by an appropriate Federal financial 
institution regulatory agency or state regulatory agency, is admissible 
either with or without a sponsoring witness.
    (3) Witnesses may use existing or newly created charts, exhibits, 
calendars, calculations, outlines or other graphic material to 
summarize, illustrate, or simplify the presentation of testimony. Such 
materials may, subject to the administrative law judge's discretion, be 
used with or without being admitted into evidence.
    (d) Objections. (1) Objections to the admissibility of evidence 
must be timely made and rulings on all objections must appear on the 
record.
    (2) When an objection to a question or line of questioning 
propounded to a witness is sustained, the examining counsel may make a 
specific proffer on the record of what he or she expected to prove by 
the expected testimony of the witness, either by representation of 
counsel or by direct interrogation of the witness.
    (3) The administrative law judge shall retain rejected exhibits, 
adequately marked for identification, for the record, and transmit such 
exhibits to the Board of Directors.
    (4) Failure to object to admission of evidence or to any ruling 
constitutes a waiver of the objection.
    (e) Stipulations. The parties may stipulate as to any relevant 
matters of fact or the authentication of any relevant documents. Such 
stipulations must be received in evidence at a hearing, and are binding 
on the parties with respect to the matters therein stipulated.
    (f) Depositions of unavailable witnesses. (1) If a witness is 
unavailable to testify at a hearing, and that witness has testified in 
a deposition to which all parties in a proceeding had notice and an 
opportunity to participate, a party may offer as evidence all or any 
part of the transcript of the deposition, including deposition 
exhibits, if any.
    (2) Such deposition transcript is admissible to the same extent 
that testimony would have been admissible had that person testified at 
the hearing, provided that if a witness refused to answer proper 
questions during the depositions, the administrative law judge may, on 
that basis, limit the admissibility of the deposition in any manner 
that justice requires.
    (3) Only those portions of a deposition received in evidence at the 
hearing constitute a part of the record.


Sec.  308.37  Post-hearing filings.

    (a) Proposed findings and conclusions and supporting briefs. (1) 
Using the same method of service for each party, the administrative law 
judge shall serve notice upon each party, that the certified 
transcript, together with all hearing exhibits and exhibits introduced 
but not admitted into evidence at the hearing, has been filed. Any 
party may file with the administrative law judge

[[Page 89960]]

proposed findings of fact, proposed conclusions of law, and a proposed 
order within 30 days following service of this notice by the 
administrative law judge or within such longer period as may be ordered 
by the administrative law judge.
    (2) Proposed findings and conclusions must be supported by citation 
to any relevant authorities and by page references to any relevant 
portions of the record. A post-hearing brief may be filed in support of 
proposed findings and conclusions, either as part of the same document 
or in a separate document. Any party who fails to file timely with the 
administrative law judge any proposed finding or conclusion is deemed 
to have waived the right to raise in any subsequent filing or 
submission any issue not addressed in such party's proposed finding or 
conclusion.
    (b) Reply briefs. Reply briefs may be filed within 15 days after 
the date on which the parties' proposed findings, conclusions, and 
order are due. Reply briefs must be strictly limited to responding to 
new matters, issues, or arguments raised in another party's papers. A 
party who has not filed proposed findings of fact and conclusions of 
law or a post-hearing brief may not file a reply brief.
    (c) Simultaneous filing required. The administrative law judge 
shall not order the filing by any party of any brief or reply brief in 
advance of the other party's filing of its brief.


Sec.  308.38  Recommended decision and filing of record.

    (a) Filing of recommended decision and record. Within 45 days after 
expiration of the time allowed for filing reply briefs under Sec.  
308.37(b), the administrative law judge shall file with and certify to 
the Administrative Officer, for decision, the record of the proceeding. 
The record must include the administrative law judge's recommended 
decision, recommended findings of fact, recommended conclusions of law, 
and proposed order; all prehearing and hearing transcripts, exhibits, 
and rulings; and the motions, briefs, memoranda, and other supporting 
papers filed in connection with the hearing. The administrative law 
judge shall serve upon each party the recommended decision, findings, 
conclusions, and proposed order.
    (b) Filing of index. At the same time the administrative law judge 
files with and certifies to the Administrative Officer for final 
determination the record of the proceeding, the administrative law 
judge shall furnish to the Administrative Officer a certified index of 
the entire record of the proceeding. The certified index shall include, 
at a minimum, an entry for each paper, document or motion filed with 
the administrative law judge in the proceeding, the date of the filing, 
and the identity of the filer. The certified index shall also include 
an exhibit index containing, at a minimum, an entry consisting of 
exhibit number and title or description for: Each exhibit introduced 
and admitted into evidence at the hearing; each exhibit introduced but 
not admitted into evidence at the hearing; each exhibit introduced and 
admitted into evidence after the completion of the hearing; and each 
exhibit introduced but not admitted into evidence after the completion 
of the hearing.


Sec.  308.39  Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  308.38, a party may file with the Administrative Officer written 
exceptions to the administrative law judge's recommended decision, 
findings, conclusions, or proposed order, to the admission or exclusion 
of evidence, or to the failure of the administrative law judge to make 
a ruling proposed by a party. A supporting brief may be filed at the 
time the exceptions are filed, either as part of the same document or 
in a separate document.
    (b) Effect of failure to file or raise exceptions. (1) Failure of a 
party to file exceptions to those matters specified in paragraph (a) of 
this section within the time prescribed is deemed a waiver of objection 
thereto.
    (2) No exception need be considered by the Board of Directors if 
the party taking exception had an opportunity to raise the same 
objection, issue, or argument before the administrative law judge and 
failed to do so.
    (c) Contents. (1) All exceptions and briefs in support of such 
exceptions must be confined to the particular matters in, or omissions 
from, the administrative law judge's recommendations to which that 
party takes exception.
    (2) All exceptions and briefs in support of exceptions must set 
forth page or paragraph references to the specific parts of the 
administrative law judge's recommendations to which exception is taken, 
the page or paragraph references to those portions of the record relied 
upon to support each exception, and the legal authority relied upon to 
support each exception.


Sec.  308.40  Review by Board of Directors.

    (a) Notice of submission to Board of Directors. When the 
Administrative Officer determines that the record in the proceeding is 
complete, the Administrative Officer shall serve notice upon the 
parties that the proceeding has been submitted to the Board of 
Directors for final decision.
    (b) Oral argument before the Board of Directors. Upon the 
initiative of the Board of Directors or on the written request of any 
party filed with the Administrative Officer within the time for filing 
exceptions, the Board of Directors may order and hear oral argument on 
the recommended findings, conclusions, decision, and order of the 
administrative law judge. A written request by a party must show good 
cause for oral argument and state reasons why arguments cannot be 
presented adequately in writing. A denial of a request for oral 
argument may be set forth in the Board of Directors' final decision. 
Oral argument before the Board of Directors must be on the record.
    (c) Final decision. (1) Decisional employees may advise and assist 
the Board of Directors in the consideration and disposition of the 
case. The final decision of the Board of Directors will be based upon 
review of the entire record of the proceeding, except that the Board of 
Directors may limit the issues to be reviewed to those findings and 
conclusions to which opposing arguments or exceptions have been filed 
by the parties.
    (2) The Board of Directors shall render a final decision within 90 
days after notification of the parties that the case has been submitted 
for final decision, or 90 days after oral argument, whichever is later, 
unless the Board of Directors orders that the action or any aspect 
thereof be remanded to the administrative law judge for further 
proceedings. Copies of the final decision and order of the Board of 
Directors shall be served upon each party to the proceeding, upon other 
persons required by statute, and, if directed by the Board of Directors 
or required by statute, upon any appropriate state or Federal 
supervisory authority.


Sec.  308.41  Stays pending judicial review.

    The commencement of proceedings for judicial review of a final 
decision and order of the FDIC may not, unless specifically ordered by 
the Board of Directors or a reviewing court, operate as a stay of any 
order issued by the FDIC. The Board of Directors may, in its 
discretion, and on such terms as it finds just, stay the effectiveness 
of all or any

[[Page 89961]]

part of its order pending a final decision on a petition for review of 
that order.

Subpart B--General Rules of Procedure


Sec.  308.101  Scope of Local Rules.

    (a) Subparts B and C of the Local Rules prescribe rules of practice 
and procedure to be followed in the administrative enforcement 
proceedings initiated by the FDIC as set forth in Sec.  308.1 of the 
Uniform Rules.
    (b) Except as otherwise specifically provided, the Uniform Rules 
and subpart B of the Local Rules shall not apply to subparts D through 
T of the Local Rules.
    (c) Subpart C of the Local Rules shall apply to any administrative 
proceeding initiated by the FDIC.
    (d) Subparts A, B, and C of this part prescribe the rules of 
practice and procedure to applicable to adjudicatory proceedings as to 
which hearings on the record are provided for by the assessment of 
civil money penalties by the FDIC against institutions, institution-
affiliated parties, and certain other persons for which it is the 
appropriate regulatory agency for any violation of section 15(c)(4) of 
the Exchange Act (15 U.S.C. 78o(c)(4)).


Sec.  308.102  Authority of Board of Directors and Administrative 
Officer.

    (a) The Board of Directors. (1) The Board of Directors may, at any 
time during the pendency of a proceeding, perform, direct the 
performance of, or waive performance of, any act which could be done or 
ordered by the Administrative Officer.
    (2) Nothing contained in this part shall be construed to limit the 
power of the Board of Directors granted by applicable statutes or 
regulations.
    (b) The Administrative Officer. (1) When no administrative law 
judge has jurisdiction over a proceeding, the Administrative Officer 
may act in place of, and with the same authority as, an administrative 
law judge, except that the Administrative Officer may not hear a case 
on the merits or make a recommended decision on the merits to the Board 
of Directors.
    (2) Pursuant to authority delegated by the Board of Directors, the 
Administrative Officer and Assistant Administrative Officer, upon the 
advice and recommendation of the Deputy General Counsel for Litigation 
or, in his absence, the Assistant General Counsel for General 
Litigation, may issue rulings in proceedings under sections 7(j), 8, 
18(j), 19, 32 and 38 of the FDIA (12 U.S.C. 1817(j), 1818, 1828(j), 
1829, 1831i and 1831o) concerning:
    (i) Denials of requests for private hearing;
    (ii) Interlocutory appeals;
    (iii) Stays pending judicial review;
    (iv) Reopenings of the record and/or remands of the record to the 
ALJ;
    (v) Supplementation of the evidence in the record;
    (vi) All remands from the courts of appeals not involving 
substantive issues;
    (vii) Extensions of stays of orders terminating deposit insurance; 
and
    (viii) All matters, including final decisions, in proceedings under 
section 8(g) of the FDIA (12 U.S.C. 1818(g)).


Sec.  308.103  Appointment of administrative law judge.

    (a) Appointment. Unless otherwise directed by the Board of 
Directors or as otherwise provided in the Local Rules, a hearing within 
the scope of this part 308 shall be held before an administrative law 
judge of the Office of Financial Institution Adjudication (``OFIA'').
    (b) Procedures. (1) The Enforcement Counsel shall promptly after 
issuance of the notice file the matter with the Office of Financial 
Institution Adjudication (``OFIA'') which shall secure the appointment 
of an administrative law judge to hear the proceeding.
    (2) OFIA shall advise the parties, in writing, that an 
administrative law judge has been appointed.


Sec.  308.104  Filings with the Board of Directors.

    (a) General rule. All materials required to be filed with or 
referred to the Board of Directors in any proceedings under this part 
shall be filed with the Administrative Officer, Federal Deposit 
Insurance Corporation, 550 17th Street NW, Washington, DC 20429.
    (b) Scope. Filings to be made with the Administrative Officer 
include pleadings and motions filed during the proceeding; the record 
filed by the administrative law judge after the issuance of a 
recommended decision; the recommended decision filed by the 
administrative law judge following a motion for summary disposition; 
referrals by the administrative law judge of motions for interlocutory 
review; motions and responses to motions filed by the parties after the 
record has been certified to the Board of Directors; exceptions and 
requests for oral argument; and any other papers required to be filed 
with the Board of Directors under this part.


Sec.  308.105  Custodian of the record.

    The Administrative Officer is the official custodian of the record 
when no administrative law judge has jurisdiction over the proceeding. 
As the official custodian, the Administrative Officer shall maintain 
the official record of all papers filed in each proceeding.


Sec.  308.106  Written testimony in lieu of oral hearing.

    (a) General rule. (1) At any time more than fifteen days before the 
hearing is to commence, on the motion of any party or on his or her own 
motion, the administrative law judge may order that the parties present 
part or all of their case-in-chief and, if ordered, their rebuttal, in 
the form of exhibits and written statements sworn to by the witness 
offering such statements as evidence, provided that if any party 
objects, the administrative law judge shall not require such a format 
if that format would violate the objecting party's right under the 
Administrative Procedure Act, or other applicable law, or would 
otherwise unfairly prejudice that party.
    (2) Any such order shall provide that each party shall, upon 
request, have the same right of oral cross-examination (or redirect 
examination) as would exist had the witness testified orally rather 
than through a written statement. Such order shall also provide that 
any party has a right to call any hostile witness or adverse party to 
testify orally.
    (b) Scheduling of submission of written testimony. (1) If written 
direct testimony and exhibits are ordered under paragraph (a) of this 
section, the administrative law judge shall require that it be filed 
within the time period for commencement of the hearing, and the hearing 
shall be deemed to have commenced on the day such testimony is due.
    (2) Absent good cause shown, written rebuttal, if any, shall be 
submitted and the oral portion of the hearing begun within 30 days of 
the date set for filing written direct testimony.
    (3) The administrative law judge shall direct, unless good cause 
requires otherwise, that--
    (i) All parties shall simultaneously file any exhibits and written 
direct testimony required under paragraph (b)(1) of this section; and
    (ii) All parties shall simultaneously file any exhibits and written 
rebuttal required under paragraph (b)(2) of this section.
    (c) Failure to comply with order to file written testimony. (1) The 
failure of any party to comply with an order to file written testimony 
or exhibits at the time and in the manner required under this section 
shall be deemed a waiver of that party's right to present any evidence, 
except testimony of a previously

[[Page 89962]]

identified adverse party or hostile witness. Failure to file written 
testimony or exhibits is, however, not a waiver of that party's right 
of cross-examination or a waiver of the right to present rebuttal 
evidence that was not required to be submitted in written form.
    (2) Late filings of papers under this section may be allowed and 
accepted only upon good cause shown.


Sec.  308.107  Document discovery.

    (a) Parties to proceedings set forth at Sec.  308.1 of the Uniform 
Rules and as provided in the Local Rules may obtain discovery only 
through the production of documents. No other form of discovery shall 
be allowed.
    (b) Any questioning at a deposition of a person producing documents 
pursuant to a document subpoena shall be strictly limited to the 
identification of documents produced by that person and a reasonable 
examination to determine whether the subpoenaed person made an adequate 
search for, and has produced, all subpoenaed documents.

NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 747

Authority and Issuance

    For the reasons set out in the joint preamble, the NCUA amends 12 
CFR part 747 as follows:

PART 747--ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF 
PRACTICE AND PROCEDURE, AND INVESTIGATIONS

0
26. The authority citation for part 747 continues to read as follows:

    Authority:  12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a, 
1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101-410; Pub. L. 
104-134; Pub. L. 109-351; Pub. L. 114-74.22.


0
27. Revise Sec.  747.0 to read as follows:


Sec.  747.0  Scope of this part.

    (a) This part describes the various formal and informal 
adjudicative actions and non-adjudicative proceedings available to the 
National Credit Union Administration Board (NCUA Board), the grounds 
for those actions and proceedings, and the procedures used in formal 
and informal hearings related to each available action. As mandated by 
section 916 of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 1818 note) (FIRREA), this part 
incorporates uniform rules of practice and procedure (Uniform Rules), 
which govern formal adjudications generally, as well as proceedings 
involving cease-and-desist actions, assessment of civil money 
penalties, and removal, prohibition and suspension actions. In 
addition, the Uniform Rules are incorporated in other subparts of this 
part that provide for formal adjudications. The administrative actions 
and proceedings described in this section, as well as the grounds and 
hearing procedures for each, are controlled by sections 120(b) (except 
where the Federal credit union is closed due to insolvency), 202(a)(3), 
and 206 of the Federal Credit Union Act (the Act), 12 U.S.C. 1766(b), 
1782(a)(3), and 1786. Should any provision of this part be inconsistent 
with these or any other provisions of the Act, as amended, the Act 
shall control. Judicial enforcement of any action or order described in 
this part, as well as judicial review thereof, shall be as prescribed 
under the Act (12 U.S.C. 1751 et seq.) and the Administrative Procedure 
Act (5 U.S.C. 500 et seq.).
    (b) As used in this part, the term ``insured credit union'' means 
any Federal credit union or any State-chartered credit union insured 
under subchapter II of the Act, unless the context indicates otherwise.
    (c) The Uniform Rules in subpart A apply to adjudicatory 
proceedings initiated on or after April 1, 2024. Any adjudicatory 
proceedings initiated before April 1, 2024, continue to be governed by 
the previous version of the Uniform Rules in 12 CFR part 747, subpart 
A.

0
28. Subpart A is revised to read as follows:
Subpart A--Uniform Rules of Practice and Procedure
Sec.
747.1 Scope.
747.2 Rules of construction.
747.3 Definitions.
747.4 Authority of the NCUA Board.
747.5 Authority of the administrative law judge.
747.6 Appearance and practice in adjudicatory proceedings.
747.7 Good faith certification.
747.8 Conflicts of interest.
747.9 Ex parte communications.
747.10 Filing of papers.
747.11 Service of papers.
747.12 Construction of time limits.
747.13 Change of time limits.
747.14 Witness fees and expenses.
747.15 Opportunity for informal settlement.
747.16 The NCUA's right to conduct examination.
747.17 Collateral attacks on adjudicatory proceeding.
747.18 Commencement of proceeding and contents of notice.
747.19 Answer.
747.20 Amended pleadings.
747.21 Failure to appear.
747.22 Consolidation and severance of actions.
747.23 Motions.
747.24 Scope of document discovery.
747.25 Request for document discovery from parties.
747.26 Document subpoenas to nonparties.
747.27 Deposition of witness unavailable for hearing.
747.28 Interlocutory review.
747.29 Summary disposition.
747.30 Partial summary disposition.
747.31 Scheduling and prehearing conferences.
747.32 Prehearing submissions.
747.33 Public hearings.
747.34 Hearing subpoenas.
747.35 Conduct of hearings.
747.36 Evidence.
747.37 Post-hearing filings.
747.38 Recommended decision and filing of record.
747.39 Exceptions to recommended decision.
747.40 Review by the NCUA Board.
747.41 Stays pending judicial review.

Subpart A--Uniform Rules of Practice and Procedure


Sec.  747.1  Scope.

    This subpart prescribes uniform rules of practice and procedure 
applicable to adjudicatory proceedings required to be conducted on the 
record after opportunity for a hearing under the following statutory 
provisions:
    (a) Cease-and-desist proceedings under section 206(e) of the Act 
(12 U.S.C. 1786(e));
    (b) Removal and prohibition proceedings under section 206(g) of the 
Act (12 U.S.C. 1786(g));
    (c) Assessment of civil money penalties by the NCUA Board against 
institutions and institution-affiliated parties for any violation of:
    (1) Section 202 of the Act (12 U.S.C. 1782);
    (2) Section 1120 of FIRREA (12 U.S.C. 3349), or any order or 
regulation issued thereunder;
    (3) The terms of any final or temporary order issued under section 
206 of the Act or any written agreement executed by the National Credit 
Union Administration (``NCUA''), any condition imposed in writing by 
the NCUA in connection with any action on any application, notice, or 
other request by the credit union or institution-affiliated party, 
certain unsafe or unsound practices or breaches of fiduciary duty, or 
any law or regulation not otherwise provided in this section, pursuant 
to 12 U.S.C. 1786(k);
    (4) Any provision of law referenced in section 102(f) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or 
regulation issued thereunder;

[[Page 89963]]

    (d) Remedial action under section 102(g) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(g)); and
    (e) This subpart also applies to all other adjudications required 
by statute to be determined on the record after opportunity for an 
agency hearing, unless otherwise specifically provided for in subparts 
B through J of this part.


Sec.  747.2  Rules of construction.

    For purposes of this part:
    (a) Any term in the singular includes the plural, and the plural 
includes the singular, if such use would be appropriate;
    (b) The term counsel includes a non-attorney representative; and
    (c) Unless the context requires otherwise, a party's counsel of 
record, if any, may, on behalf of that party, take any action required 
to be taken by the party.


Sec.  747.3  Definitions.

    For purposes of this part, unless explicitly stated to the 
contrary:
    (a) Administrative Law Judge (ALJ) means one who presides at an 
administrative hearing under authority set forth at 5 U.S.C. 556.
    (b) Adjudicatory proceeding means a proceeding conducted pursuant 
to these rules and leading to the formulation of a final order other 
than a regulation.
    (c) Decisional employee means any member of the NCUA Board's or 
ALJ's staff who has not engaged in an investigative or prosecutorial 
role in a proceeding and who may assist the NCUA Board or the ALJ, 
respectively, in preparing orders, recommended decisions, decisions, 
and other documents under the Uniform Rules.
    (d) Electronic signature means affixing the equivalent of a 
signature to an electronic document filed or transmitted 
electronically.
    (e) Enforcement Counsel means any individual who files a notice of 
appearance as counsel on behalf of the NCUA in an adjudicatory 
proceeding.
    (f) Final order means an order issued by the NCUA with or without 
the consent of the affected institution or the institution-affiliated 
party, that has become final, without regard to the pendency of any 
petition for reconsideration or review.
    (g) Institution includes:
    (1) Any Federal credit union as that term is defined in section 
101(1) of the Act (12 U.S.C. 1752(1)); and
    (2) Any insured State-chartered credit union as that term is 
defined in section 101(7) of the FCUA (12 U.S.C. 1752(7)).
    (h) Institution-affiliated party means any institution-affiliated 
party as that term is defined in section 206(r) of the Act (12 U.S.C. 
1786(r)).
    (i) Local Rules means those rules promulgated by the NCUA in 
subparts B through I of this part.
    (j) NCUA means the National Credit Union Administration.
    (k) NCUA Board means the National Credit Union Administration Board 
or a person delegated to perform the functions of the NCUA Board.
    (l) OFIA means the Office of Financial Institution Adjudication, 
the executive body charged with overseeing the administration of 
administrative enforcement proceedings for the NCUA, the Board of 
Governors of the Federal Reserve System (Board of Governors), the 
Federal Deposit Insurance Corporation (FDIC), and the Office of the 
Comptroller of the Currency (OCC).
    (m) Party means the NCUA and any person named as a party in any 
notice.
    (n) Person means an individual, sole proprietor, partnership, 
corporation, unincorporated association, trust, joint venture, pool, 
syndicate, agency, or other entity or organization, including an 
institution as defined in paragraph (g) of this section.
    (o) Respondent means any party other than the NCUA.
    (p) Uniform Rules means those rules in this subpart that are common 
to the NCUA, the Board of Governors, the FDIC, and the OCC.
    (q) Violation means any violation as that term is defined in 
section 3(v) of the Federal Deposit Insurance Act (12 U.S.C. 1813(v)).


Sec.  747.4  Authority of the NCUA Board.

    The NCUA Board may, at any time during the pendency of a 
proceeding, perform, direct the performance of, or waive performance 
of, any act which could be done or ordered by the ALJ.


Sec.  747.5  Authority of the administrative law judge (ALJ).

    (a) General rule. All proceedings governed by this part must be 
conducted in accordance with the provisions of 5 U.S.C. chapter 5. The 
ALJ has all powers necessary to conduct a proceeding in a fair and 
impartial manner and to avoid unnecessary delay.
    (b) Powers. The ALJ has all powers necessary to conduct the 
proceeding in accordance with paragraph (a) of this section, including 
the following powers:
    (1) To administer oaths and affirmations;
    (2) To issue subpoenas, subpoenas duces tecum, protective orders, 
and other orders, as authorized by this part, and to quash or modify 
any such subpoenas and orders;
    (3) To receive relevant evidence and to rule upon the admission of 
evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
subpart;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling and/or pre-hearing conferences as set forth 
in Sec.  747.31;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the NCUA 
Board has the power to grant any motion to dismiss the proceeding or to 
decide any other motion that results in a final determination of the 
merits of the proceeding;
    (8) To prepare and present to the NCUA Board a recommended decision 
as provided in this subpart;
    (9) To recuse oneself by motion made by a party or on the ALJ's own 
motion;
    (10) To establish time, place and manner limitations on the 
attendance of the public and the media for any public hearing; and
    (11) To do all other things necessary and appropriate to discharge 
the duties of an ALJ.


Sec.  747.6  Appearance and practice in adjudicatory proceedings.

    (a) Appearance before the NCUA or an ALJ--(1) By attorneys. Any 
member in good standing of the bar of the highest court of any state, 
commonwealth, possession, territory of the United States, or the 
District of Columbia may represent others before the NCUA if such 
attorney is not currently suspended or debarred from practice before 
the NCUA.
    (2) By non-attorneys. An individual may appear on the individual's 
own behalf.
    (3) Notice of appearance. (i) Any individual acting on the 
individual's own behalf or as counsel on behalf of a party, including 
the NCUA Board, must file a notice of appearance with OFIA at or before 
the time that the individual submits papers or otherwise appears on 
behalf of a party in the adjudicatory proceeding. The notice of 
appearance must include:
    (A) A written declaration that the individual is currently 
qualified as provided in paragraph (a)(1) or (2) of this section and is 
authorized to represent the particular party; and
    (B) A written acknowledgement that the individual has reviewed and 
will comply with the Uniform Rules and Local Rules in this part 747.
    (ii) By filing a notice of appearance on behalf of a party in an 
adjudicatory proceeding, the counsel agrees and represents that the 
counsel is authorized to accept service on behalf of the

[[Page 89964]]

represented party and that, in the event of withdrawal from 
representation, the counsel will, if required by the ALJ, continue to 
accept service until new counsel has filed a notice of appearance or 
until the represented party indicates that the party will proceed on a 
pro se basis.
    (b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or 
contumacious conduct at any phase of any adjudicatory proceeding may be 
grounds for exclusion or suspension of counsel from the proceeding.


Sec.  747.7  Good faith certification.

    (a) General requirement. Every filing or submission of record 
following the issuance of a notice must be signed by at least one 
counsel of record in the counsel's individual name and must state that 
counsel's mailing address, electronic mail address, and telephone 
number. A party who acts as the party's own counsel must sign that 
person's individual name and state that person's mailing address, 
electronic mail address, and telephone number on every filing or 
submission of record. Electronic signatures may be used to satisfy the 
signature requirements of this section.
    (b) Effect of signature. (1) The signature of counsel or a party 
will constitute a certification: the counsel or party has read the 
filing or submission of record; to the best of the counsel's or party's 
knowledge, information, and belief formed after reasonable inquiry, the 
filing or submission of record is well-grounded in fact and is 
warranted by existing law or a good faith argument for the extension, 
modification, or reversal of existing law; and the filing or submission 
of record is not made for any improper purpose, such as to harass or to 
cause unnecessary delay or needless increase in the cost of litigation.
    (2) If a filing or submission of record is not signed, the ALJ will 
strike the filing or submission of record, unless it is signed promptly 
after the omission is called to the attention of the pleader or movant.
    (c) Effect of making oral motion or argument. The act of making any 
oral motion or oral argument by any counsel or party constitutes a 
certification that to the best of the counsel's or party's knowledge, 
information, and belief formed after reasonable inquiry, the counsel's 
or party's statements are well-grounded in fact and are warranted by 
existing law or a good faith argument for the extension, modification, 
or reversal of existing law, and are not made for any improper purpose, 
such as to harass or to cause unnecessary delay or needless increase in 
the cost of litigation.


Sec.  747.8  Conflicts of interest.

    (a) Conflict of interest in representation. No person may appear as 
counsel for another person in an adjudicatory proceeding if it 
reasonably appears that such representation may be materially limited 
by that counsel's responsibilities to a third person or by the 
counsel's own interests. The ALJ may take corrective measures at any 
stage of a proceeding to cure a conflict of interest in representation, 
including the issuance of an order limiting the scope of representation 
or disqualifying an individual from appearing in a representative 
capacity for the duration of the proceeding.
    (b) Certification and waiver. If any person appearing as counsel 
represents two or more parties to an adjudicatory proceeding or also 
represents a non-party on a matter relevant to an issue in the 
proceeding, counsel must certify in writing at the time of filing the 
notice of appearance required by Sec.  747.6(a):
    (1) That the counsel has personally and fully discussed the 
possibility of conflicts of interest with each such party and non-
party; and
    (2) That each such party and non-party waives any right it might 
otherwise have had to assert any known conflicts of interest or to 
assert any non-material conflicts of interest during the course of the 
proceeding.


Sec.  747.9  Ex parte communications.

    (a) Definition--(1) Ex parte communications. Ex parte communication 
means any material oral or written communication relevant to the merits 
of an adjudicatory proceeding that was neither on the record nor on 
reasonable prior notice to all parties that takes place between:
    (i) An interested person outside the NCUA (including such person's 
counsel); and
    (ii) The ALJ handling that proceeding, the NCUA Board, or a 
decisional employee.
    (2) Exception. A request for status of the proceeding does not 
constitute an ex parte communication.
    (b) Prohibition of ex parte communications. From the time the 
notice is issued by the NCUA Board until the date that the NCUA Board 
issues a final decision pursuant to Sec.  747.40(c):
    (1) An interested person outside the NCUA must not make or 
knowingly cause to be made an ex parte communication to the NCUA Board, 
the ALJ, or a decisional employee; and
    (2) The NCUA Board, ALJ, or decisional employee may not make or 
knowingly cause to be made to any interested person outside the NCUA 
any ex parte communication.
    (c) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the ALJ, the NCUA Board, or any 
other person identified in paragraph (a) of this section, that person 
will cause all such written communications (or, if the communication is 
oral, a memorandum stating the substance of the communication) to be 
placed on the record of the proceeding and served on all parties. All 
other parties to the proceeding may, within ten days of service of the 
ex parte communication, file responses thereto and to recommend any 
sanctions that they believe to be appropriate under the circumstances. 
The ALJ or the NCUA Board then determines whether any action should be 
taken concerning the ex parte communication in accordance with 
paragraph (d) of this section.
    (d) Sanctions. Any party or counsel to a party who makes a 
prohibited ex parte communication, or who encourages or solicits 
another to make any such communication, may be subject to any 
appropriate sanction or sanctions imposed by the NCUA Board or the ALJ 
including, but not limited to, exclusion from the proceedings and an 
adverse ruling on the issue which is the subject of the prohibited 
communication.
    (e) Separation of functions--(1) In general. Except to the extent 
required for the disposition of ex parte matters as authorized by law, 
the ALJ may not:
    (i) Consult a person or party on a fact in issue unless on notice 
and opportunity for all parties to participate; or
    (ii) Be responsible to or subject to the supervision or direction 
of an employee or agent engaged in the performance of investigative or 
prosecuting functions for the NCUA.
    (2) Decision process. An employee or agent engaged in the 
performance of investigative or prosecuting functions for the NCUA in a 
case may not, in that or a factually related case, participate or 
advise in the decision, recommended decision, or agency review of the 
recommended decision under Sec.  747.40, except as witness or counsel 
in administrative or judicial proceedings.


Sec.  747.10  Filing of papers.

    (a) Filing. Any papers required to be filed, excluding documents 
produced in response to a discovery request pursuant to Sec. Sec.  
747.25 and 747.26, must be filed with OFIA, except as otherwise 
provided.

[[Page 89965]]

    (b) Manner of filing. Unless otherwise specified by the NCUA Board 
or the ALJ, filing may be accomplished by:
    (1) Electronic mail or other electronic means designated by the 
NCUA Board or the ALJ;
    (2) Personal service;
    (3) Delivering the papers to a same day courier service or 
overnight delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) Formal requirements as to papers filed--(1) Form. All papers 
filed must set forth the name, mailing address, electronic mail 
address, and telephone number of the counsel or party making the filing 
and must be accompanied by a certification setting forth when and how 
service has been made on all other parties. All papers filed must be 
double-spaced and printed or typewritten on an 8\1/2\ x 11 inch page 
and must be clear and legible.
    (2) Signature. All papers must be dated and signed as provided in 
Sec.  747.7.
    (3) Caption. All papers filed must include at the head thereof, or 
on a title page, the name of the NCUA and of the filing party, the 
title and docket number of the proceeding, and the subject of the 
particular paper.


Sec.  747.11  Service of papers.

    (a) By the parties. Except as otherwise provided, a party filing 
papers must serve a copy upon the counsel of record for all other 
parties to the proceeding so represented, and upon any party not so 
represented.
    (b) Method of service. Except as provided in paragraphs (c)(2) and 
(d) of this section, a serving party must use one of the following 
methods of service:
    (1) Electronic mail or other electronic means;
    (2) Personal service;
    (3) Delivering the papers by same day courier service or overnight 
delivery service; or
    (4) Mailing the papers by first class, registered, or certified 
mail.
    (c) By the NCUA Board or the ALJ. (1) All papers required to be 
served by the NCUA Board or the ALJ upon a party who has appeared in 
the proceeding in accordance with Sec.  747.6 will be served by 
electronic mail or other electronic means designated by the NCUA Board 
or ALJ.
    (2) If a respondent has not appeared in the proceeding in 
accordance with Sec.  747.6, the NCUA Board or the ALJ will serve the 
respondent by any of the following methods:
    (i) By personal service;
    (ii) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (iii) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
respondent;
    (iv) By registered or certified mail, delivery by a same day 
courier service, or by an overnight delivery service to the 
respondent's last known mailing address; or
    (v) By any other method reasonably calculated to give actual 
notice.
    (d) Subpoenas. Service of a subpoena may be made:
    (1) By personal service;
    (2) If the person to be served is an individual, by delivery to a 
person of suitable age and discretion at the physical location where 
the individual resides or works;
    (3) If the person to be served is a corporation or other 
association, by delivery to an officer, managing or general agent, or 
to any other agent authorized by appointment or by law to receive 
service and, if the agent is one authorized by statute to receive 
service and the statute so requires, by also mailing a copy to the 
party;
    (4) By registered or certified mail, delivery by a same day courier 
service, or by an overnight delivery service to the person's last known 
mailing address; or
    (5) By any other method reasonably calculated to give actual 
notice.
    (e) Area of service. Service in any state, territory, possession of 
the United States, or the District of Columbia, on any person or 
company doing business in any state, territory, possession of the 
United States, or the District of Columbia, or on any person as 
otherwise provided by law, is effective without regard to the place 
where the hearing is held, provided that if service is made on a 
foreign bank in connection with an action or proceeding involving one 
or more of its branches or agencies located in any state, territory, 
possession of the United States, or the District of Columbia, service 
must be made on at least one branch or agency so involved.


Sec.  747.12  Construction of time limits.

    (a) General rule. In computing any period of time prescribed by 
this subpart, the date of the act or event that commences the 
designated period of time is not included. The last day so computed is 
included unless it is a Saturday, Sunday, or Federal holiday. When the 
last day is a Saturday, Sunday, or Federal holiday, the period runs 
until the end of the next day that is not a Saturday, Sunday, or 
Federal holiday. Intermediate Saturdays, Sundays, and Federal holidays 
are included in the computation of time. However, when the time period 
within which an act is to be performed is ten days or less, not 
including any additional time allowed for in paragraph (c) of this 
section, intermediate Saturdays, Sundays, and Federal holidays are not 
included.
    (b) When papers are deemed to be filed or served. (1) Filing and 
service are deemed to be effective:
    (i) In the case of transmission by electronic mail or other 
electronic means, upon transmittal by the serving party;
    (ii) In the case of overnight delivery service or first class, 
registered, or certified mail, upon deposit in or delivery to an 
appropriate point of collection; or
    (iii) In the case of personal service or same day courier delivery, 
upon actual service.
    (2) The effective filing and service dates specified in paragraph 
(b)(1) of this section may be modified by the NCUA Board or ALJ in the 
case of filing or by agreement of the parties in the case of service.
    (c) Calculation of time for service and filing of responsive 
papers. Whenever a time limit is measured by a prescribed period from 
the service of any notice or paper, the applicable time limits are 
calculated as follows:
    (1) If service is made by electronic mail or other electronic means 
or by same day courier delivery, add one calendar day to the prescribed 
period;
    (2) If service is made by overnight delivery service, add two 
calendar days to the prescribed period; or
    (3) If service is made by first class, registered, or certified 
mail, add three calendar days to the prescribed period.


Sec.  747.13  Change of time limits.

    Except as otherwise provided by law, the ALJ may, for good cause 
shown, extend the time limits prescribed by the Uniform Rules or by any 
notice or order issued in the proceedings. After the referral of the 
case to the NCUA Board pursuant to Sec.  747.38, the NCUA Board may 
grant extensions of the time limits for good cause shown. Extensions 
may be granted at the motion of a party after notice and opportunity to 
respond is afforded all non-moving parties or on the NCUA Board's or 
the ALJ's own motion.

[[Page 89966]]

Sec.  747.14  Witness fees and expenses.

    (a) In general. A witness, including an expert witness, who 
testifies at a deposition or hearing will be paid the same fees for 
attendance and mileage as are paid in the United States district courts 
in proceedings in which the United States is a party, except as 
provided in paragraph (b) of this section and unless otherwise waived.
    (b) Exception for testimony by a party. In the case of testimony by 
a party, no witness fees or mileage need to be paid. The NCUA will not 
be required to pay any fees to, or expenses of, any witness not 
subpoenaed by the NCUA.
    (c) Timing of payment. Fees and mileage in accordance with this 
paragraph (c) must be paid in advance by the party requesting the 
subpoena, except that fees and mileage need not be tendered in advance 
where the NCUA is the party requesting the subpoena.


Sec.  747.15  Opportunity for informal settlement.

    Any respondent may, at any time in the proceeding, unilaterally 
submit to Enforcement Counsel written offers or proposals for 
settlement of a proceeding, without prejudice to the rights of any of 
the parties. Any such offer or proposal may only be made to Enforcement 
Counsel. Submission of a written settlement offer does not provide a 
basis for adjourning or otherwise delaying all or any portion of a 
proceeding under this part. No settlement offer or proposal, or any 
subsequent negotiation or resolution, is admissible as evidence in any 
proceeding.


Sec.  747.16  The NCUA's right to conduct examination.

    Nothing contained in this subpart limits in any manner the right of 
the NCUA to conduct any examination, inspection, or visitation of any 
institution or institution-affiliated party, or the right of the NCUA 
to conduct or continue any form of investigation authorized by law.


Sec.  747.17  Collateral attacks on adjudicatory proceeding.

    If an interlocutory appeal or collateral attack is brought in any 
court concerning all or any part of an adjudicatory proceeding, the 
challenged adjudicatory proceeding will continue without regard to the 
pendency of that court proceeding. No default or other failure to act 
as directed in the adjudicatory proceeding within the times prescribed 
in this subpart will be excused based on the pendency before any court 
of any interlocutory appeal or collateral attack.


Sec.  747.18  Commencement of proceeding and contents of notice.

    (a) Commencement of proceeding. (1) A proceeding governed by this 
subpart is commenced by issuance of a notice by the NCUA Board.
    (2) The notice must be served by Enforcement Counsel upon the 
respondent and given to any other appropriate financial institution 
supervisory authority where required by law. Enforcement Counsel may 
serve the notice upon counsel for the respondent, provided that 
Enforcement Counsel has confirmed that counsel represents the 
respondent in the matter and will accept service of the notice on 
behalf of the respondent.
    (3) Enforcement Counsel must file the notice with OFIA.
    (b) Contents of notice. Notice pleading applies. The notice must 
provide:
    (1) The legal authority for the proceeding and for the NCUA's 
jurisdiction over the proceeding;
    (2) Matters of fact or law showing that the NCUA is entitled to 
relief;
    (3) A proposed order or prayer for an order granting the requested 
relief;
    (4) The time, place, and nature of the hearing as required by law 
or regulation;
    (5) The time within which to file an answer as required by law or 
regulation;
    (6) The time within which to request a hearing as required by law 
or regulation; and
    (7) That the answer and/or request for a hearing must be filed with 
OFIA.


Sec.  747.19  Answer.

    (a) When. Within 20 days of service of the notice, respondent must 
file an answer as designated in the notice. In a civil money penalty 
proceeding, respondent must also file a request for a hearing within 20 
days of service of the notice.
    (b) Content of answer. An answer must specifically respond to each 
paragraph or allegation of fact contained in the notice and must admit, 
deny, or state that the respondent lacks sufficient information to 
admit or deny each allegation of fact. A statement of lack of 
information has the effect of a denial. Denials must fairly meet the 
substance of each allegation of fact denied; general denials are not 
permitted. When a respondent denies part of an allegation, that part 
must be denied and the remainder specifically admitted. Any allegation 
of fact in the notice which is not denied in the answer is deemed 
admitted for purposes of the proceeding. A respondent is not required 
to respond to the portion of a notice that constitutes the prayer for 
relief, or proposed order. The answer must set forth affirmative 
defenses, if any, asserted by the respondent.
    (c) Default--(1) Effect of failure to answer. Failure of a 
respondent to file an answer required by this section within the time 
provided constitutes a waiver of the respondent's right to appear and 
contest the allegations in the notice. If no timely answer is filed, 
Enforcement Counsel may file a motion for entry of an order of default. 
Upon a finding that no good cause has been shown for the failure to 
file a timely answer, the ALJ will file with the NCUA Board a 
recommended decision containing the findings and the relief sought in 
the notice. Any final order issued by the NCUA Board based upon a 
respondent's failure to answer is deemed to be an order issued upon 
consent.
    (2) Effect of failure to request a hearing in civil money penalty 
proceedings. If respondent fails to request a hearing as required by 
law within the time provided, the notice of assessment constitutes a 
final and unappealable order of the NCUA Board without further action 
by the ALJ.


Sec.  747.20  Amended pleadings.

    (a) Amendments. The notice or answer may be amended or supplemented 
at any stage of the proceeding. The respondent must answer an amended 
notice within the time remaining for the respondent's answer to the 
original notice, or within ten days after service of the amended 
notice, whichever period is longer, unless the NCUA Board or ALJ orders 
otherwise for good cause.
    (b) Amendments to conform to the evidence. When issues not raised 
in the notice or answer are tried at the hearing by express or implied 
consent of the parties, they will be treated in all respects as if they 
had been raised in the notice or answer, and no formal amendments are 
required. If evidence is objected to at the hearing on the ground that 
it is not within the issues raised by the notice or answer, the ALJ may 
admit the evidence when admission is likely to assist in adjudicating 
the merits of the action and the objecting party fails to satisfy the 
ALJ that the admission of such evidence would unfairly prejudice that 
party's action or defense upon the merits. The ALJ may grant a 
continuance to enable the objecting party to meet such evidence.


Sec.  747.21  Failure to appear.

    Failure of a respondent to appear in person at the hearing or by a 
duly authorized counsel constitutes a waiver of respondent's right to a 
hearing and is deemed an admission of the facts as alleged and consent 
to the relief sought in the notice. Without further

[[Page 89967]]

proceedings or notice to the respondent, the ALJ will file with the 
NCUA Board a recommended decision containing the findings and the 
relief sought in the notice.


Sec.  747.22  Consolidation and severance of actions.

    (a) Consolidation. (1) On the motion of any party, or on the ALJ's 
own motion, the ALJ may consolidate, for some or all purposes, any two 
or more proceedings, if each such proceeding involves or arises out of 
the same transaction, occurrence, or series of transactions or 
occurrences, or involves at least one common respondent or a material 
common question of law or fact, unless such consolidation would cause 
unreasonable delay or injustice.
    (2) In the event of consolidation under paragraph (a)(1) of this 
section, appropriate adjustment to the prehearing schedule must be made 
to avoid unnecessary expense, inconvenience, or delay.
    (b) Severance. The ALJ may, upon the motion of any party, sever the 
proceeding for separate resolution of the matter as to any respondent 
only if the ALJ finds:
    (1) Undue prejudice or injustice to the moving party would result 
from not severing the proceeding; and
    (2) Such undue prejudice or injustice would outweigh the interests 
of judicial economy and expedition in the complete and final resolution 
of the proceeding.


Sec.  747.23  Motions.

    (a) In writing. (1) Except as otherwise provided in this section, 
an application or request for an order or ruling must be made by 
written motion.
    (2) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.
    (3) No oral argument may be held on written motions except as 
otherwise directed by the ALJ. Written memoranda, briefs, affidavits, 
or other relevant material or documents may be filed in support of or 
in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the ALJ directs that such motion be reduced to writing.
    (c) Filing of motions. Motions must be filed with the ALJ, except 
that following the filing of the recommended decision, motions must be 
filed with the NCUA Board.
    (d) Responses. (1) Except as otherwise provided in this section, 
within ten days after service of any written motion, or within such 
other period of time as may be established by the ALJ or the NCUA 
Board, any party may file a written response to a motion. The ALJ will 
not rule on any oral or written motion before each party has had an 
opportunity to file a response.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed a consent by that party to the 
entry of an order substantially in the form of the order accompanying 
the motion.
    (e) Dilatory motions. Frivolous, dilatory or repetitive motions are 
prohibited. The filing of such motions may form the basis for 
sanctions.
    (f) Dispositive motions. Dispositive motions are governed by 
Sec. Sec.  747.29 and 747.30.


Sec.  747.24  Scope of document discovery.

    (a) Limits on discovery. (1) Subject to the limitations set out in 
paragraphs (b), (c), and (d) of this section, a party to a proceeding 
under this subpart may obtain document discovery by serving a written 
request to produce documents. For purposes of a request to produce 
documents, the term documents includes writings, drawings, graphs, 
charts, photographs, recordings, electronically stored information, and 
other data or data compilations stored in any medium from which 
information can be obtained either directly or, if necessary, after 
translation by the responding party, into a reasonably usable form.
    (2) Discovery by use of deposition is governed by Sec.  747.100.
    (3) Discovery by use of either interrogatories or requests for 
admission is not permitted.
    (4) Any request to produce documents that calls for irrelevant 
material; or that is unreasonable, oppressive, excessive in scope, 
unduly burdensome, or repetitive of previous requests, or that seeks to 
obtain privileged documents will be denied or modified. A request is 
unreasonable, oppressive, excessive in scope, or unduly burdensome if, 
among other things, it fails to include justifiable limitations on the 
time period covered and the geographic locations to be searched, or the 
time provided to respond in the request is inadequate.
    (b) Relevance. A party may obtain document discovery regarding any 
non-privileged matter that has material relevance to the merits of the 
pending action.
    (c) Privileged matter. Privileged documents are not discoverable. 
Privileges include the attorney-client privilege, attorney work-product 
doctrine, bank examination privilege, law enforcement privilege, any 
government's or government agency's deliberative process privilege, and 
any other privileges the Constitution, any applicable act of Congress, 
or the principles of common law provide.
    (d) Time limits. All document discovery, including all responses to 
discovery requests, must be completed by the date set by the ALJ and no 
later than 30 days prior to the date scheduled for the commencement of 
the hearing, except as provided in the Local Rules. No exceptions to 
this time limit are permitted, unless the ALJ finds on the record that 
good cause exists for waiving the requirements of this paragraph (d).


Sec.  747.25  Request for document discovery from parties.

    (a) Document requests. (1) Any party may serve on any other party a 
request to produce and permit the requesting party or its 
representative to inspect or copy any discoverable documents that are 
in the possession, custody, or control of the party upon whom the 
request is served. In the case of a request for inspection, the 
responding party may produce copies of documents or of electronically 
stored information instead of permitting inspection.
    (2) The request:
    (i) Must describe with reasonable particularity each item or 
category of items to be inspected or produced; and
    (ii) Must specify a reasonable time, place, and manner for the 
inspection or production.
    (b) Production or copying--(1) General. Unless otherwise specified 
by the ALJ or agreed upon by the parties, the producing party must 
produce copies of documents as they are kept in the usual course of 
business or organized to correspond to the categories of the request, 
and electronically stored information must be produced in a form in 
which it is ordinarily maintained or in a reasonably usable form.
    (2) Costs. The producing party must pay its own costs to respond to 
a discovery request, unless otherwise agreed by the parties.
    (c) Obligation to update responses. A party who has responded to a 
discovery request with a response that was complete when made is not 
required to supplement the response to include documents thereafter 
acquired, unless the responding party learns:
    (1) The response was materially incorrect when made; or
    (2) The response, though correct when made, is no longer true and a 
failure to amend the response is, in substance, a knowing concealment.
    (d) Motions to limit discovery. (1) Any party that objects to a 
discovery request

[[Page 89968]]

may, within 20 days of being served with such request, file a motion in 
accordance with the provisions of Sec.  747.23 to strike or otherwise 
limit the request. If an objection is made to only a portion of an item 
or category in a request, the portion objected to must be specified. 
Any objections not made in accordance with this paragraph and Sec.  
747.23 are waived.
    (2) The party who served the request that is the subject of a 
motion to strike or limit may file a written response within ten days 
of service of the motion. No other party may file a response.
    (e) Privilege. At the time other documents are produced, the 
producing party must reasonably identify all documents withheld on the 
grounds of privilege and must produce a statement of the basis for the 
assertion of privilege. When similar documents that are protected by 
attorney-client privilege, attorney work-product doctrine, bank 
examination privilege, law enforcement privilege, any government's or 
government agency's deliberative process privilege, or any other 
privileges of the Constitution, any applicable act of Congress, or the 
principles of common law, or are voluminous, these documents may be 
identified by category instead of by individual document. The ALJ 
retains discretion to determine when the identification by category is 
insufficient.
    (f) Motions to compel production. (1) If a party withholds any 
documents as privileged or fails to comply fully with a discovery 
request, the requesting party may, within ten days of the assertion of 
privilege or of the time the failure to comply becomes known to the 
requesting party, file a motion in accordance with the provisions of 
Sec.  747.23 for the issuance of a subpoena compelling production.
    (2) The party who asserted the privilege or failed to comply with 
the document request may file a written response to a motion to compel 
within ten days of service of the motion. No other party may file a 
response.
    (g) Ruling on motions. After the time for filing responses pursuant 
to this section has expired, the ALJ will rule promptly on all motions 
filed pursuant to this section. If the ALJ determines that a discovery 
request, or any of its terms, calls for irrelevant material, is 
unreasonable, oppressive, excessive in scope, unduly burdensome, or 
repetitive of previous requests, or seeks to obtain privileged 
documents, the ALJ may deny or modify the request, and may issue 
appropriate protective orders, upon such conditions as justice may 
require. The pendency of a motion to strike or limit discovery or to 
compel production is not a basis for staying or continuing the 
proceeding, unless otherwise ordered by the ALJ. Notwithstanding any 
other provision in this part, the ALJ may not release, or order a party 
to produce, documents withheld on grounds of privilege if the party has 
stated to the ALJ its intention to file a timely motion for 
interlocutory review of the ALJ's order to produce the documents, and 
until the motion for interlocutory review has been decided.
    (h) Enforcing discovery subpoenas. If the ALJ issues a subpoena 
compelling production of documents by a party, the subpoenaing party 
may, in the event of noncompliance and to the extent authorized by 
applicable law, apply to any appropriate United States district court 
for an order requiring compliance with the subpoena. A party's right to 
seek court enforcement of a subpoena will not in any manner limit the 
sanctions that may be imposed by the ALJ against a party who fails to 
produce subpoenaed documents.


Sec.  747.26  Document subpoenas to nonparties.

    (a) General rules. (1) Any party may apply to the ALJ for the 
issuance of a document discovery subpoena addressed to any person who 
is not a party to the proceeding. The application must contain a 
proposed document subpoena and a brief statement showing the general 
relevance and reasonableness of the scope of documents sought. The 
subpoenaing party must specify a reasonable time, place, and manner for 
making production in response to the document subpoena.
    (2) A party may apply for a document subpoena under this section 
only within the time period during which such party could serve a 
discovery request under Sec.  747.24(d). The party obtaining the 
document subpoena is responsible for serving it on the subpoenaed 
person and for serving copies on all parties. Document subpoenas may be 
served in any state, territory, or possession of the United States, the 
District of Columbia, or as otherwise provided by law.
    (3) The ALJ will promptly issue any document subpoena requested 
pursuant to this section. If the ALJ determines that the application 
does not set forth a valid basis for the issuance of the subpoena, or 
that any of its terms are unreasonable, oppressive, excessive in scope, 
or unduly burdensome, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon such conditions as may be consistent 
with the Uniform Rules.
    (b) Motion to quash or modify. (1) Any person to whom a document 
subpoena is directed may file a motion to quash or modify such subpoena 
with the ALJ. The motion must be accompanied by a statement of the 
basis for quashing or modifying the subpoena. The movant must serve the 
motion on all parties, and any party may respond to such motion within 
ten days of service of the motion.
    (2) Any motion to quash or modify a document subpoena must be filed 
on the same basis, including the assertion of privilege, upon which a 
party could object to a discovery request under Sec.  747.25(d), and 
during the same time limits during which such an objection could be 
filed.
    (c) Enforcing document subpoenas. If a subpoenaed person fails to 
comply with any subpoena issued pursuant to this section or any order 
of the ALJ, which directs compliance with all or any portion of a 
document subpoena, the subpoenaing party or any other aggrieved party 
may, to the extent authorized by applicable law, apply to an 
appropriate United States district court for an order requiring 
compliance with so much of the document subpoena as the ALJ has not 
quashed or modified. A party's right to seek court enforcement of a 
document subpoena will in no way limit the sanctions that may be 
imposed by the ALJ on a party who induces a failure to comply with 
subpoenas issued under this section.


Sec.  747.27  Deposition of witness unavailable for hearing.

    (a) General rules. (1) If a witness will not be available for the 
hearing, a party desiring to preserve that witness' testimony for the 
record may apply in accordance with the procedures set forth in 
paragraph (a)(2) of this section, to the ALJ for the issuance of a 
subpoena, including a subpoena duces tecum, requiring the attendance of 
the witness at a deposition. The ALJ may issue a deposition subpoena 
under this section upon showing:
    (i) The witness will be unable to attend or may be prevented from 
attending the hearing because of age, sickness or infirmity, or will 
otherwise be unavailable;
    (ii) The witness' unavailability was not procured or caused by the 
subpoenaing party;
    (iii) The testimony is reasonably expected to be material; and
    (iv) Taking the deposition will not result in any undue burden to 
any other party and will not cause undue delay of the proceeding.
    (2) The application must contain a proposed deposition subpoena and 
a brief statement of the reasons for the issuance of the subpoena. The 
subpoena

[[Page 89969]]

must name the witness whose deposition is to be taken and specify the 
time, manner, and place for taking the deposition. A deposition 
subpoena may require the witness to be deposed at any place within the 
country in which that witness resides or has a regular place of 
employment, by remote means, or such other convenient place or manner, 
as the ALJ fixes.
    (3) Any requested subpoena that sets forth a valid basis for its 
issuance must be promptly issued, unless the ALJ requires a written 
response or requires attendance at a conference concerning whether the 
requested subpoena should be issued.
    (4) The party obtaining a deposition subpoena is responsible for 
serving it on the witness and for serving copies on all parties. Unless 
the ALJ orders otherwise, no deposition under this section may be taken 
on fewer than ten days' notice to the witness and all parties.
    (b) Objections to deposition subpoenas. (1) The witness and any 
party who has not had an opportunity to oppose a deposition subpoena 
issued under this section may file a motion with the ALJ to quash or 
modify the subpoena prior to the time for compliance specified in the 
subpoena, but not more than ten days after service of the subpoena.
    (2) A statement of the basis for the motion to quash or modify a 
subpoena issued under this section must accompany the motion. The 
motion must be served on all parties.
    (c) Procedure upon deposition. (1) Each witness testifying pursuant 
to a deposition subpoena must be duly sworn. By stipulation of the 
parties or by order of the ALJ, a court reporter or other person 
authorized to administer an oath may administer the oath remotely 
without being in the physical presence of the deponent. Each party must 
have the right to examine the witness. Objections to questions or 
documents must be in short form, stating the grounds for the objection. 
Failure to object to questions or documents is not deemed a waiver 
except where the ground for the objection might have been avoided if 
the objection had been timely presented. All questions, answers, and 
objections must be recorded.
    (2) Any party may move before the ALJ for an order compelling the 
witness to answer any questions the witness has refused to answer or 
submit any evidence the witness has refused to submit during the 
deposition.
    (3) The deposition must be subscribed by the witness, unless the 
parties and the witness, by stipulation, have waived the signing, or 
the witness is ill, cannot be found, or has refused to sign. If the 
deposition is not subscribed by the witness, the court reporter taking 
the deposition must certify that the transcript is a true and complete 
transcript of the deposition.
    (d) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section, or fails to comply 
with any order of the ALJ, which directs compliance with all or any 
portion of a deposition subpoena under paragraph (b) or (c)(2) of this 
section, the subpoenaing party or other aggrieved party may, to the 
extent authorized by applicable law, apply to an appropriate United 
States district court for an order requiring compliance with the 
portions of the subpoena with which the subpoenaed party has not 
complied. A party's right to seek court enforcement of a deposition 
subpoena in no way limits the sanctions that may be imposed by the ALJ 
on a party who fails to comply with, or procures a failure to comply 
with, a subpoena issued under this section.


Sec.  747.28  Interlocutory review.

    (a) General rule. The NCUA Board may review a ruling of the ALJ 
prior to the certification of the record to the NCUA Board only in 
accordance with the procedures set forth in this section and Sec.  
747.23.
    (b) Scope of review. The NCUA Board may exercise interlocutory 
review of a ruling of the ALJ if the NCUA Board finds:
    (1) The ruling involves a controlling question of law or policy as 
to which substantial grounds exist for a difference of opinion;
    (2) Immediate review of the ruling may materially advance the 
ultimate termination of the proceeding;
    (3) Subsequent modification of the ruling at the conclusion of the 
proceeding would be an inadequate remedy; or
    (4) Subsequent modification of the ruling would cause unusual delay 
or expense.
    (c) Procedure. Any request for interlocutory review must be filed 
by a party with the ALJ within ten days of the ruling and must 
otherwise comply with Sec.  747.23. Any party may file a response to a 
request for interlocutory review in accordance with Sec.  747.23(d). 
Upon the expiration of the time for filing all responses, the ALJ will 
refer the matter to the NCUA Board for final disposition.
    (d) Suspension of proceeding. Neither a request for interlocutory 
review nor any disposition of such a request by the NCUA Board under 
this section suspends or stays the proceeding unless otherwise ordered 
by the ALJ or the NCUA Board.


Sec.  747.29  Summary disposition.

    (a) In general. The ALJ will recommend that the NCUA Board issue a 
final order granting a motion for summary disposition if the undisputed 
pleaded facts, admissions, affidavits, stipulations, documentary 
evidence, matters as to which official notice may be taken, and any 
other evidentiary materials properly submitted in connection with a 
motion for summary disposition show:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.
    (b) Filing of motions and responses. (1) Any party who believes 
there is no genuine issue of material fact to be determined and that 
the party is entitled to a decision as a matter of law may move at any 
time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 days after service of such a motion, 
or within such time period as allowed by the ALJ, may file a response 
to such motion.
    (2) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, investigatory depositions, transcripts, 
affidavits, and any other evidentiary materials that the moving party 
contends supports the moving party's position. The motion must also be 
accompanied by a brief containing the points and authorities in support 
of the contention of the moving party. Any party opposing a motion for 
summary disposition must file a statement setting forth those material 
facts as to which the opposing party contends a genuine dispute exists. 
Such opposition must be supported by evidence of the same type as that 
submitted with the motion for summary disposition and a brief 
containing the points and authorities in support of the contention that 
summary disposition would be inappropriate.
    (c) Hearing on motion. At the written request of any party or on 
the ALJ's own motion, the ALJ may hear oral argument on the motion for 
summary disposition.
    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the ALJ will determine whether 
the moving party is entitled to summary

[[Page 89970]]

disposition. If the ALJ determines that summary disposition is 
warranted, the ALJ will submit a recommended decision to that effect to 
the NCUA Board. If the ALJ finds that no party is entitled to summary 
disposition, the ALJ will make a ruling denying the motion.


Sec.  747.30  Partial summary disposition.

    If the ALJ determines that a party is entitled to summary 
disposition as to certain claims only, the ALJ will defer submitting a 
recommended decision as to those claims. A hearing on the remaining 
issues must be ordered. Those claims for which the ALJ has determined 
that summary disposition is warranted will be addressed in the 
recommended decision filed at the conclusion of the hearing.


Sec.  747.31  Scheduling and prehearing conferences.

    (a) Scheduling conference. Within 30 days of service of the notice 
or order commencing a proceeding, the ALJ will direct counsel for all 
parties to meet with the ALJ at a specified time and manner prior to 
the hearing for the purpose of scheduling the course and conduct of the 
proceeding. This meeting is called a ``scheduling conference.'' The 
schedule for the identification of potential witnesses, the time for 
and manner of discovery, and the exchange of any prehearing materials 
including witness lists, statements of issues, stipulations, exhibits, 
and any other materials may also be determined at the scheduling 
conference.
    (b) Prehearing conferences. The ALJ may, in addition to the 
scheduling conference, on the ALJ's own motion or at the request of any 
party, direct counsel for the parties to confer with the ALJ at a 
prehearing conference to address any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, 
authenticity and admissibility into evidence of documents;
    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes;
    (7) Amendments to pleadings; and
    (8) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (c) Transcript. The ALJ may require that a scheduling or prehearing 
conference be recorded by a court reporter. A transcript of the 
conference and any materials filed, including orders, becomes part of 
the record of the proceeding. A party may obtain a copy of the 
transcript at the party's expense.
    (d) Scheduling or prehearing orders. At or within a reasonable time 
following the conclusion of the scheduling conference or any prehearing 
conference, the ALJ will serve on each party an order setting forth any 
agreements reached and any procedural determinations made.


Sec.  747.32  Prehearing submissions.

    (a) Party prehearing submissions. Within the time set by the ALJ, 
but in no case later than 20 days before the start of the hearing, each 
party must file with the ALJ and serve on every other party:
    (1) A prehearing statement that states:
    (i) The party's position with respect to the legal issues 
presented;
    (ii) The statutory and case law upon which the party relies; and
    (iii) The facts that the party expects to prove at the hearing;
    (2) A final list of witnesses to be called to testify at the 
hearing, including the name, mailing address, and electronic mail 
address of each witness and a short summary of the expected testimony 
of each witness, which need not identify the exhibits to be relied upon 
by each witness at the hearing;
    (3) A list of the exhibits expected to be introduced at the hearing 
along with a copy of each exhibit; and
    (4) Stipulations of fact, if any.
    (b) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraph (a) of 
this section, except for good cause shown.


Sec.  747.33  Public hearings.

    (a) General rule. All hearings must be open to the public, unless 
the NCUA Board, in the NCUA Board's discretion, determines that holding 
an open hearing would be contrary to the public interest. Within 20 
days of service of the notice, any respondent may file with the NCUA 
Board a request for a private hearing, and any party may file a reply 
to such a request. A party must serve on the ALJ a copy of any request 
or reply the party files with the NCUA Board. The form of, and 
procedure for, these requests and replies are governed by Sec.  747.23. 
A party's failure to file a request or a reply constitutes a waiver of 
any objections regarding whether the hearing will be public or private.
    (b) Filing document under seal. Enforcement Counsel, in Enforcement 
Counsel's discretion, may file any document or part of a document under 
seal if disclosure of the document would be contrary to the public 
interest. The ALJ will take all appropriate steps to preserve the 
confidentiality of such documents or parts thereof, including closing 
portions of the hearing to the public.


Sec.  747.34  Hearing subpoenas.

    (a) Issuance. (1) Upon application of a party showing general 
relevance and reasonableness of scope of the testimony or other 
evidence sought, the ALJ may issue a subpoena or a subpoena duces tecum 
requiring the attendance of a witness at the hearing or the production 
of documentary or physical evidence at the hearing. The application for 
a hearing subpoena must also contain a proposed subpoena specifying the 
attendance of a witness or the production of evidence from any state, 
territory, or possession of the United States, the District of 
Columbia, or as otherwise provided by law at any designated place where 
the hearing is being conducted. The party making the application must 
serve a copy of the application and the proposed subpoena on every 
other party.
    (2) A party may apply for a hearing subpoena at any time before the 
commencement of a hearing. During a hearing, a party may make an 
application for a subpoena orally on the record before the ALJ.
    (3) The ALJ will promptly issue any hearing subpoena requested 
pursuant to this section. If the ALJ determines that the application 
does not set forth a valid basis for the issuance of the subpoena, or 
that any of its terms are unreasonable, oppressive, excessive in scope, 
or unduly burdensome, the ALJ may refuse to issue the subpoena or may 
issue it in a modified form upon any conditions consistent with this 
subpart. Upon issuance by the ALJ, the party making the application 
must serve the subpoena on the person named in the subpoena and on each 
party.
    (b) Motion to quash or modify. (1) Any person to whom a hearing 
subpoena is directed or any party may file a motion to quash or modify 
the subpoena, accompanied by a statement of the basis for quashing or 
modifying the subpoena. The movant must serve the motion on each party 
and on the person named in the subpoena. Any party may respond to the 
motion within ten days of service of the motion.
    (2) Any motion to quash or modify a hearing subpoena must be filed 
prior to the time specified in the subpoena for compliance but not more 
than ten days

[[Page 89971]]

after the date of service of the subpoena upon the movant.
    (c) Enforcing subpoenas. If a subpoenaed person fails to comply 
with any subpoena issued pursuant to this section or any order of the 
ALJ which directs compliance with all or any portion of a document 
subpoena, the subpoenaing party or any other aggrieved party may seek 
enforcement of the subpoena pursuant to Sec.  747.26(c).


Sec.  747.35  Conduct of hearings.

    (a) General rules. (1) Conduct of hearings. Hearings must be 
conducted so as to provide a fair and expeditious presentation of the 
relevant disputed issues. Each party has the right to present its case 
or defense by oral and documentary evidence and to conduct such cross 
examination as may be required for full disclosure of the facts.
    (2) Order of hearing. Enforcement Counsel will present its case-in-
chief first, unless otherwise ordered by the ALJ, or unless otherwise 
expressly specified by law or regulation. Enforcement Counsel will be 
the first party to present an opening statement and a closing statement 
and may make a rebuttal statement after the respondent's closing 
statement. If there are multiple respondents, respondents may agree 
among themselves as to their order of presentation of their cases, but 
if they do not agree, the ALJ will fix the order.
    (3) Examination of witnesses. Only one counsel for each party may 
conduct an examination of a witness, except that in the case of 
extensive direct examination, the ALJ may permit more than one counsel 
for the party presenting the witness to conduct the examination. A 
party may have one counsel conduct the direct examination and another 
counsel conduct re-direct examination of a witness, or may have one 
counsel conduct the cross examination of a witness and another counsel 
conduct the re-cross examination of a witness.
    (4) Stipulations. Unless the ALJ directs otherwise, all 
stipulations of fact and law previously agreed upon by the parties, and 
all documents, the admissibility of which have been previously 
stipulated, will be admitted into evidence upon commencement of the 
hearing.
    (b) Transcript. The hearing must be recorded and transcribed. The 
reporter will make the transcript available to any party upon payment 
by that party to the reporter of the cost of the transcript. The ALJ 
may order the record corrected, either upon motion to correct, upon 
stipulation of the parties, or following notice to the parties upon the 
ALJ's own motion.
    (c) Electronic presentation. Based on the circumstances of each 
hearing, the ALJ may direct the use of, or any party may use, an 
electronic presentation during the hearing. If the ALJ requires an 
electronic presentation during the hearing, each party will be 
responsible for their own presentation and related costs, unless the 
parties agree to another manner in which to allocate presentation 
responsibilities and costs.


Sec.  747.36  Evidence.

    (a) Admissibility. (1) Except as is otherwise set forth in this 
section, relevant, material, and reliable evidence that is not unduly 
repetitive is admissible to the fullest extent authorized by the 
Administrative Procedure Act and other applicable law.
    (2) Evidence that would be admissible under the Federal Rules of 
Evidence is admissible in a proceeding conducted pursuant to this 
subpart.
    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence may not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant, 
material, reliable, and not unduly repetitive.
    (b) Official notice. (1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court and any material information in the official public 
records of any Federal or State government agency.
    (2) All matters officially noticed by the ALJ or the NCUA Board 
must appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, must be afforded an opportunity to 
object.
    (c) Documents. (1) A duplicate copy of a document is admissible to 
the same extent as the original, unless a genuine issue is raised as to 
whether the copy is in some material respect not a true and legible 
copy of the original.
    (2) Subject to the requirements of paragraph (a) of this section, 
any document, including a report of examination, supervisory activity, 
inspection, or visitation, prepared by an appropriate Federal financial 
institutions regulatory agency or by a State regulatory agency, is 
admissible either with or without a sponsoring witness.
    (3) Witnesses may use existing or newly created charts, exhibits, 
calendars, calculations, outlines, or other graphic material to 
summarize, illustrate, or simplify the presentation of testimony. Such 
materials may, subject to the ALJ's discretion, be used with or without 
being admitted into evidence.
    (d) Objections. (1) Objections to the admissibility of evidence 
must be timely made and rulings on all objections must appear on the 
record.
    (2) When an objection to a question or line of questioning 
propounded to a witness is sustained, the examining counsel may make a 
specific proffer on the record of what the examining counsel expected 
to prove by the expected testimony of the witness either by 
representation of counsel or by direct questioning of the witness.
    (3) The ALJ will retain rejected exhibits, adequately marked for 
identification, for the record, and transmit such exhibits to the NCUA 
Board.
    (4) Failure to object to admission of evidence or to any ruling 
constitutes a waiver of the objection.
    (e) Stipulations. The parties may stipulate as to any relevant 
matters of fact or the authentication of any relevant documents. Such 
stipulations must be received in evidence at a hearing and are binding 
on the parties with respect to the matters therein stipulated.
    (f) Depositions of unavailable witnesses. (1) If a witness is 
unavailable to testify at a hearing, and that witness has testified in 
a deposition to which all parties in a proceeding had notice and an 
opportunity to participate, a party may offer as evidence all or any 
part of the transcript of the deposition, including deposition 
exhibits, if any.
    (2) Such deposition transcript is admissible to the same extent 
that testimony would have been admissible had that person testified at 
the hearing, provided that if a witness refused to answer proper 
questions during the depositions, the ALJ may, on that basis, limit the 
admissibility of the deposition in any manner that justice requires.
    (3) Only those portions of a deposition received in evidence at the 
hearing constitute a part of the record.


Sec.  747.37  Post-hearing filings.

    (a) Proposed findings and conclusions and supporting briefs. (1) 
Using the same method of service for each party, the ALJ will serve 
notice upon each party that the certified transcript, together with all 
hearing exhibits and exhibits introduced but not admitted into evidence 
at the hearing, has been filed. Any party may file with the ALJ 
proposed findings of fact, proposed conclusions of law, and a proposed 
order within 30 days following service of this notice by the ALJ or 
within such longer period as may be ordered by the ALJ.

[[Page 89972]]

    (2) Proposed findings and conclusions must be supported by citation 
to any relevant authorities and by page references to any relevant 
portions of the record. A post-hearing brief may be filed in support of 
proposed findings and conclusions, either as part of the same document 
or in a separate document. Any party who ails to file timely with the 
ALJ any proposed finding or conclusion is deemed to have waived the 
right to raise in any subsequent filing or submission any issue not 
addressed in such party's proposed finding or conclusion.
    (b) Reply briefs. Reply briefs may be filed within 15 days after 
the date on which the parties' proposed findings, conclusions, and 
order are due. Reply briefs must be strictly limited to responding to 
new matters, issues, or arguments raised in another party's papers. A 
party who has not filed proposed findings of fact and conclusions of 
law or a post-hearing brief may not file a reply brief.
    (c) Simultaneous filing required. The ALJ will not order the filing 
by any party of any brief or reply brief in advance of the other 
party's filing of its brief.


Sec.  747.38  Recommended decision and filing of record.

    (a) Filing of recommended decision and record. Within 45 days after 
expiration of the time allowed for filing reply briefs under Sec.  
747.37(b), the ALJ will file with and certify to the NCUA Board, for 
decision, the record of the proceeding. The record must include the 
ALJ's recommended decision, recommended findings of fact, recommended 
conclusions of law, and proposed order; all prehearing and hearing 
transcripts, exhibits, and rulings; and the motions, briefs, memoranda, 
and other supporting papers filed in connection with the hearing. The 
ALJ will serve upon each party the recommended decision, findings, 
conclusions, and proposed order.
    (b) Filing of index. At the same time the ALJ files with and 
certifies to the NCUA Board for final determination the record of the 
proceeding, the ALJ will furnish to the NCUA Board a certified index of 
the entire record of the proceeding. The certified index must include, 
at a minimum, an entry for each paper, document, or motion filed with 
the ALJ in the proceeding, the date of the filing, and the identity of 
the filer. The certified index must also include an exhibit index 
containing, at a minimum, an entry consisting of exhibit number and 
title or description for: each exhibit introduced and admitted into 
evidence at the hearing; each exhibit introduced but not admitted into 
evidence at the hearing; each exhibit introduced and admitted into 
evidence after the completion of the hearing; and each exhibit 
introduced but not admitted into evidence after the completion of the 
hearing.


Sec.  747.39  Exceptions to recommended decision.

    (a) Filing exceptions. Within 30 days after service of the 
recommended decision, findings, conclusions, and proposed order under 
Sec.  747.38, a party may file with the NCUA Board written exceptions 
to the ALJ's recommended decision, findings, conclusions, or proposed 
order, to the admission or exclusion of evidence, or to the failure of 
the ALJ to make a ruling proposed by a party. A supporting brief may be 
filed at the time the exceptions are filed, either as part of the same 
document or in a separate document.
    (b) Effect of failure to file or raise exceptions. (1) Failure of a 
party to file exceptions to those matters specified in paragraph (a) of 
this section within the time prescribed is deemed a waiver of objection 
thereto.
    (2) No exception need be considered by the NCUA Board if the party 
taking exception had an opportunity to raise the same objection, issue, 
or argument before the ALJ and failed to do so.
    (c) Contents. (1) All exceptions and briefs in support of such 
exceptions must be confined to the particular matters in, or omissions 
from, the ALJ's recommendations to which that party takes exception.
    (2) All exceptions and briefs in support of exceptions must set 
forth page or paragraph references to the specific parts of the ALJ's 
recommendations to which exception is taken, the page or paragraph 
references to those portions of the record relied upon to support each 
exception, and the legal authority relied upon to support each 
exception.


Sec.  747.40  Review by the NCUA Board.

    (a) Notice of submission to the NCUA Board. When the NCUA Board 
determines that the record in the proceeding is complete, the NCUA 
Board will serve notice upon the parties that the proceeding has been 
submitted to the NCUA Board for final decision.
    (b) Oral argument before the NCUA Board. Upon the initiative of the 
NCUA Board or on the written request of any party filed with the NCUA 
Board within the time for filing exceptions, the NCUA Board may order 
and hear oral argument on the recommended findings, conclusions, 
decision, and order of the ALJ. A written request by a party must show 
good cause for oral argument and state reasons why arguments cannot be 
presented adequately in writing. A denial of a request for oral 
argument may be set forth in the NCUA Board's final decision. Oral 
argument before the NCUA Board must be on the record.
    (c) The NCUA Board's final decision. (1) Decisional employees may 
advise and assist the NCUA Board in the consideration and disposition 
of the case. The final decision of the NCUA Board will be based upon 
review of the entire record of the proceeding, except that the NCUA 
Board may limit the issues to be reviewed to those findings and 
conclusions to which opposing arguments or exceptions have been filed 
by the parties.
    (2) The NCUA Board will render a final decision within 90 days 
after notification of the parties that the case has been submitted for 
final decision, or 90 days after oral argument, whichever is later, 
unless the NCUA Board orders that the action or any aspect thereof be 
remanded to the ALJ for further proceedings. Copies of the final 
decision and order of the NCUA Board will be served upon each party to 
the proceeding, upon other persons required by statute, and, if 
directed by the NCUA Board or required by statute, upon any appropriate 
State or Federal supervisory authority.


Sec.  747.41  Stays pending judicial review.

    The commencement of proceedings for judicial review of a final 
decision and order of the NCUA Board may not, unless specifically 
ordered by the NCUA Board or a reviewing court, operate as a stay of 
any order issued by the NCUA Board. The NCUA Board may, in the NCUA 
Board's discretion, and on such terms as the NCUA Board finds just, 
stay the effectiveness of all or any part of an order pending a final 
decision on a petition for review of that order.

Michael J. Hsu,
Acting Comptroller of the Currency.


[[Page 89973]]


    By order of the Board of Governors of the Federal Reserve 
System.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on May 31, 2023.
James P. Sheesley,
Assistant Executive Secretary.

    By order of the National Credit Union Administration Board.

    Dated at Alexandria, VA, this 31st day of October, 2023.
Melane Conyers-Ausbrooks,
Secretary of the NCUA Board.
[FR Doc. 2023-25646 Filed 12-27-23; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P; 7535-01-P


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